UPDATE 3-Taiwan punishes Deutsche Bank, others in currency speculation case
(Adds Deutsche comment)
TAIPEI, Feb 7 (Reuters) - Taiwan's central bank said onSunday it had banned Deutsche Bank from tradingTaiwan dollar deliverable and non-deliverable forwards andsuspended it for two years from trading forex derivatives aspart of a crackdown on speculation.
The Taiwan dollar is at its highest in more than 23years against the U.S. dollar as the island's trade-dependenteconomy booms on global demand for its tech products fuelled bypeople working from home.
The central bank has been particularly concerned about acase where it said foreign banks helped grain companies engagein currency speculation through deliverable forwards, affectingthe stability of Taiwan's foreign exchange market.
Sources told Reuters on Friday that the central bank hadsent letters outlining punishments to Deutsche Bank, CitigroupInc, ING and Australia and New Zealand BankingGroup 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 Taipeioffices would not be allowed to trade Taiwan dollar deliverableand non-deliverable forwards for nine months.
Citi's Taipei office would be suspended from trading Taiwandollar deliverable forwards for two months, it added.
A Deutsche Bank spokesperson said: "We are working closelywith the CBC and our clients to ensure that FX transactionsinvolving the Taiwan Dollar have a genuine underlying need, andremain committed to playing a constructive role in the ongoingdevelopment of Taiwan's capital markets."
Citi and ANZ declined to comment. Representatives for INGdid not respond to a request for comment.
The punishments will come into effect on Monday, the centralbank said.
Eugene Tsai, head of the central bank's foreign exchangedepartment, told Reuters that transactions made by the banks inaccordance with the rules before Friday had been completed onschedule.
He added that the punishment against Deutsche meant it wouldnot be able to trade forex options or swaps.
The central bank announced its probe into the case lastmonth, which it said involved eight grain-tradingcompanies.(Reporting by Liang-sa Loh and Ben Blanchard; Editing byChristian Schmollinger, Kim Coghill & Shri Navaratnam)
