TAIPEI (Reuters) – Taiwan’s central bank said on Sunday it had banned Deutsche Bank from trading Taiwanese currency for deliverable and non-deliverable futures contracts and suspended for two years for trading forex derivatives as part of a crackdown on speculation .
The Taiwan dollar is at a more than 23-year high against the US dollar as the island’s trade-dependent economy booms due to global demand for its tech products while people work from home. The central bank was particularly concerned about a case in which foreign banks assisted grain companies in currency speculation through deliverable futures, which affected the stability of the Taiwanese foreign exchange market.
Sources told Reuters on Friday that the central bank had sent letters punishing Deutsche Bank, CitigroupInc, ING and Australia and New Zealand Banking Group Ltd (ANZ) for their involvement.
Beyond the penalty for Deutsche Bank’s Taipei branch, the central bank said in a statement that ING and ANZ’s Taipei offices would not be allowed to trade deliverable and non-deliverable forwards in Taiwan for nine months.
Citi’s Taipei office would be suspended for two months for trading Taiwan dollar deliverable futures, it added.
Citi and ANZ declined to comment. Representatives from the other two banks did not immediately respond to a request for comment.
The sentences will take effect on Monday, the central bank added.
Eugene Tsai, head of the central bank’s foreign exchange division, told Reuters that the transactions the banks had made according to the rules before Friday had been completed on schedule.
He added that the punishment against Deutsche meant that it would be unable to trade forex options or swaps.
The central bank last month announced its investigation into the case, allegedly involving eight grain traders.
Reporting by Liang-sa Loh and Ben Blanchard; Edited by Christian Schmollinger and Kim Coghill