CENTRAL BANK’S VIEW: The bank’s governor said legislative proposals should focus on guiding funds to infrastructure enhancement and areas that would help the economy

Taipei Times
Date: Jul 03, 2019
By: Crystal Hsu  /  Staff reporter

Massive capital repatriation from abroad might lead to appreciation pressure on the New Taiwan dollar and weaken the central bank’s ability to regulate the local economy if the money is not properly guided to real investment, bank Governor Yang Chin-long (楊金龍) said yesterday.

“Massive capital repatriation, if not used for real investment, but parked in local financial markets, would weigh on interest rates and put pressure on the local currency to appreciate,” Yang told a seminar on the impact of capital repatriation.

The Legislative Yuan is reviewing bills regarding the issue. Taiwanese with capital abroad have indicated a willingness to wire money home if the government would grant favorable tax terms.

Taiwan has since the 1990s loosened restrictions on cross-border capital movements, enabling global funds to be main players in the local foreign exchange market, which was previously handled by exporters and importers.    [FULL  STORY]