Taiwan imposed capital controls on Tuesday, banning foreign funds from investing in time deposits in a move that appeared to be aimed at deterring bets on currency appreciation. The central bank, which announced in October that foreigners had parked about T$500 billion ($15.5 billion) in Taiwan dollar accounts, said it wanted investors betting on Taiwan's economy to put their money in stocks.
The ban, announced by the financial regulator, reflects concern among policymakers in some emerging markets that the inflow of money could create asset price bubbles and boost their currencies to levels that would undermine exports. Last month, Brazil announced a 2 percent tax on foreign investment in stocks and fixed-income securities to contain the rapid strengthening of the real. Over T$4.63 trillion of foreign funds flowed into Taiwan up to September this year, the Financial Supervisory Commission said, with about 0.21 percent of that being placed in time deposits.