Taiwan punishes Deutsche Bank, others in currency speculation case

BANKING - TAIPEI. Taiwan's central bank said on Sunday it had banned Deutsche Bank from trading Taiwan dollar deliverable and non-deliverable forwards and suspended it for two years from trading forex derivatives as part of a crackdown on speculation.

The Taiwan dollar is at a more than 23-year-high against the U.S. dollar as the island's trade-dependent economy booms on global demand for its tech products as people work from home.

The central bank has been particularly concerned about a case where it said foreign banks helped grain companies engage in currency speculation through deliverable forwards, affecting the stability of Taiwan's foreign exchange market.

Sources told Reuters on Friday that the central bank had sent letters outlining punishments to Deutsche Bank, Citigroup Inc, ING and Australia and New Zealand Banking Group Ltd (ANZ) for their involvement.

Apart from the punishment for Deutsche Bank's Taipei branch, the central bank said in statement that ING and ANZ's Taipei offices would not be allowed to trade Taiwan dollar deliverable and non-deliverable forwards for nine months.

Citi's Taipei office would be suspended from trading Taiwan dollar deliverable forwards for two months, it added.

Citi declined to comment. Representatives for the other three banks did not immediately respond to a request for comment.

The punishments will come into effect on Monday, the central bank added.

Eugene Tsai, head of the central bank's foreign exchange department, told Reuters that transactions made by the banks in accordance with the rules before Friday had been completed on schedule.

He added that the punishment against Deutsche meant it would not be able to trade forex options or swaps.

The central bank announced its probe into the case last month, which it said involved eight grain-trading companies.