WASHINGTON/TAIPEI — The U.S. Treasury and Taiwan’s central bank on Friday reaffirmed their commitment to avoid manipulating their currencies for unfair trade advantage, while agreeing to deepen cooperation on macroeconomic and foreign-exchange policy matters. In a joint statement, both sides underscored that any intervention in currency markets should only be employed to counter “excess volatility and disorderly movements,” not to skew exchange rates for competitive gain.
The pledge comes amid persistent scrutiny: Taiwan remains on the U.S. Treasury’s monitoring list for foreign-exchange practices, though Treasury’s most recent semi-annual currency report found “no major trading partner” engaging in outright manipulation.
In a separate statement, Taiwan’s central bank rebuffed earlier speculation that Washington had urged the island to let its currency appreciate. The central bank said unequivocally, “the U.S. Treasury Department never requested an appreciation of the Taiwan dollar.”
Both agencies emphasized that foreign-exchange interventions must be transparent and limited in scope. They committed to publicly disclosing intervention operations quarterly, with a one-quarter lag, as well as reporting their foreign-exchange reserves and forward-position data in line with International Monetary Fund templates.
The Treasury and the central bank also agreed on a broader principle: public investment vehicles such as pension funds should not use their capital flows to target exchange rates. Instead, these tools should be used for “risk-adjusted return and diversification purposes.”
Taiwan’s central bank further committed to enhancing its transparency. Beginning in 2026, it will shift from semi-annual to quarterly disclosure of its foreign-exchange intervention activities.
In defending its approach to intervention, Taiwan’s central bank said that actions will be bi-directional aimed at moderating both rapid appreciation and depreciation. The bank said this aligns with its long-standing foreign-exchange policy principles.
Officials from both sides described the renewed vows as part of a “positive working relationship,” with ongoing dialogue expected on macroeconomic and currency-rate policies.
Taiwan also clarified that the agreement is unrelated to its ongoing tariff negotiations with the U.S. The central bank noted that it is not part of the cabinet-level Taiwan–U.S. Economic and Trade Working Group.
Despite the public affirmations, markets responded. According to Bloomberg, forward markets for the Taiwan dollar moved sharply as investors digested the new commitment from the central bank.
Analysts say the agreement underscores a delicate balancing act: Taiwan must manage currency volatility without triggering U.S. accusations of manipulation, while Washington seeks assurances that Taipei’s capital flows and interventions aren’t being used for trade leverage.
Whether the renewed transparency and restrictions will be enough to reassure investors and regulators remains to be seen but Friday’s statement marks a significant moment, reaffirming both sides’ interest in stability over competitive currency tactics.
