Taiwan Faces Delicate Currency Balance to Avoid Manipulator Tag

The Taiwanese dollar’s rally is boxing in the island’s central bank, leaving it with limited room to intervene in order to avoid a “currency manipulator” label from the US.

Heavy interventions in the first half of the year have left the Central Bank of the Republic of China (CBC), as the institution is formally known, with a buffer of $4.5 billion for such operations in the second half, according to Bloomberg calculations. That’s based on a US Treasury criteria that net purchases of foreign currency in interventions should be below 2% of gross domestic product over 12 months.

A smaller ...