In recent days and weeks, the central bank has been busy refuting market rumors and media speculation that its repeated warnings on inflows of hot money and its checks on banks’ foreign-exchange transactions and forward trades have caused a decline on the stock market.
For its part, the central bank has done what it is required to do to safeguard the nation’s economy, monetary policy and price stability in the long term, although its recent rhetoric did have a direct impact on the exchange rate of the New Taiwan dollar and indirectly on the stock market. Make no mistake, the currency markets can impact equity markets in various ways — and vice versa.