(Bloomberg) -- Taiwan's central bank said it plans to tighten rules on local companies' foreign exchange transactions in the latest move to curb speculation after the Taiwan dollar rose to its strongest in 23 Years.
The monetary authority will be able to order firms to seek approval for forex transactions when necessary, according to draft revisions to existing rules announced on the central bank's website.
The revised rules are aimed at maintaining stability in currency markets and preventing speculation, said Stella Heh, deputy director general at the central bank's department of foreign exchange. She said new requirements for foreign exchange transaction declarations will be announced at the start of each calendar year.
Under current regulations, forex transactions below $50m per year do not require supporting documents or the approval of the central bank. The monetary authority pointed out in late January that in order to circumvent those requirements, some companies had set up new businesses to enlarge their quota.
Read: Cargill, Deutsche Bank Among Firms Taiwan Probes for FX Trades
The central bank's plan to revise rules comes after it probed eight of Asia's leading food traders for allegedly speculating on the local currency. The monetary authority also warned in January that enterprises should not use foreign loans for currency speculation.
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