Jan 27 (Reuters) - More governments around the world are moving to keep their currencies from strengthening or control the flow of money into their economies as investors pour money into higher-yielding markets, turning their backs on low interest rates in developed economies.
Below are recent cases of direct or indirect government intervention in the currency markets, compiled by Reuters:
ISRAEL SEEKS TO ANNUL TAX EXEMPTION ON SHORT-TERM DEBT
* Israel's Finance Ministry says on Jan. 27 it is acting to annul a tax exemption for foreign investors on profit from investments in short-term government bonds and short-term Bank of Israel bills called makams.
* The Bank of Israel says on Jan. 20 it will impose a 10 percent reserve requirement for foreign exchange swaps and forwards trades conducted by non-residents, effective Jan. 27.
* On Jan. 19, the central bank announces it will require Israelis and foreigners to report on transactions in foreign exchange swaps and forwards of more than $10 million in one day.
* Non-residents who perform transactions in short-term Bank of Israel bills known as makams and short-term government bonds of more than 10 million shekels in one day will be required to report details of the transactions and their balance of holdings of such assets.
-- Story links: [ID:nLDE70Q1HO] [ID:nLDE70J19Z] [ID:nLDE70I0EK]
BRAZIL ACTS IN FUTURES MARKET, TARGETS BANKS' POSITIONS AND INFLOWS
* The central bank on Jan. 14 sells $988 million in reverse currency swaps, a derivative that effectively allows the bank to buy U.S. dollars on the futures market.
* New reserve requirements on banks' short positions on U.S. dollars aim to reduce speculative trade.
* Aggressive measures promised by incoming President
Rousseff on Dec. 31, including targeted tariff increases and tax
breaks to address effects of strong real
* Raises bank reserve requirements on Dec. 4 to cool a credit boom and ease the currency situation.
* Sovereign wealth fund authorized to buy dollars on spot market.
* Government triples tax on foreign purchases of bonds to 6 percent on Oct. 18 to curb inflows into fixed income market.
* Government increases tax on derivatives margins to dissuade short-term investors.
-- Story links: [ID:nN14137379] [ID:nLDE7050Z6] [ID:nN30113578]
CHILE LAUNCHES FOREX INTERVENTION, HALTS RATE HIKES
* Central bank holds benchmark interest rate steady on Jan. 13 after raising it for seven consecutive months, in a move widely seen complementing its currency intervention.
* Central bank begins a record $12 billion in dollar purchases during 2011, warning against intervention "addiction".
* Chilean President Sebastian Pinera says he has no plans for capital controls.
* Central bank lifts limits on pension funds' overseas investment.
-- Story links: [ID:nN13283103] [ID:nN04206531] [ID:nN04221079]
PERU BUYS DOLLARS, ENCOURAGES INVESTMENT ABROAD
* On Dec. 31 government trims average tariff on imports to
3.4 percent from 5 percent, possibly resulting in increased
imports and less appreciation pressure on the sol
* Central bank buys about $9 billion dollars on the spot market in 2010, equivalent to around 6 percent of GDP. The treasury also bought around $500 million.
* On Nov. 26 banking regulator SBS says drawing up rule to curb use of short-term derivatives called non-deliverable forwards (NDFs) to limit pressure on the sol.
* Central bank raises deposit requirements on bank accounts, especially those tied to foreign loans, in a bid to limit speculation on the sol.
-- Story links: [ID:nN26131354] [ID:Nn31130618]
TAIWAN TIGHTENS FOREX RULES
* Financial Supervisory Commission says on Dec. 30 it will investigate bank trading to see whether foreign capital involved in speculation.
* On Dec. 27 the central bank caps trading in non-deliverable forwards at one fifth of a bank's total foreign exchange trading.
* Tightened reserve requirements ratio for Taiwan dollar passbook deposits held by foreign investors.
-- Story links [ID:nTOE6BR007] [ID:nTOE6BT02Q] [ID:nTOE6B200N]
SOUTH KOREA SET TO IMPOSE BANK LEVY, WITHHOLDING TAX
* Announces on Dec. 20 a proposal to levy banks' foreign currency debt from late 2011, expected to be at a level less than 0.5 percent.
* Government expected to reinstate withholding tax on local bond holdings by foreign investors' later this year, expected to be set at 14 percent.
* In June, sets ceilings on foreign exchange derivatives that banks can hold of 250 percent of equity capital for foreign bank branches and 50 percent for domestic banks. Says at end of December that these will be cut further to 200 and 40 percent respectively.
-- Story links: [ID:nTOE702015] [ID:nTOE6B6021] [ID:nSUL000219]
TURKEY RAISES RESERVE RATIOS ON LIRA DEPOSITS
* Central bank on Jan. 24 raises reserve requirements on one-month lira deposits by 200 basis points to 10 percent of the amount deposited, at the top end of analysts' expectations.
* Central bank on Jan. 20 cuts its one-week repo policy rate by 25 bps in a surprise move.
* Central bank says on Dec. 21 it will use all tools in its policy arsenal to cap speculative inflows.
* Increases reserve requirements for banks' short-term lira deposits, to prevent lira strengthening.
* Signals may also lift requirement for foreign-exchange deposits.
* Says not actively considering Tobin tax on hot money.
-- Story links: [ID:nLDE70N12F] [ID:nLDE70J19K] [ID:nLDE6BK0TQ]
SOUTH AFRICA EASES EXCHANGE CONTROLS
* South Africa eases exchange controls on Dec. 14, allowing local institutions to invest more money abroad
* Government says it will build up foreign currency reserves
to curb rand
* But analysts doubt it has financial muscle to force down rand; finance minister says international cooperation needed.
--Story links: [ID:nL3E6NE0FH] [ID:nLDE68F1ER]
INDONESIA SAYS TO CONTROL BANKS' FOREIGN CURRENCY HOLDINGS
* Central bank signals on Dec. 3 it will impose new measures to control inflows, including management of commercial banks' minimum reserve ratios in foreign currency bank accounts and rupiah-denominated giro accounts held by foreigners with local banks.
* The central bank introduced a minimum holding period of one month for its bills in June this year in a move to channel strong capital inflows away from short-term investments.
-- Story links: [ID:nL3E6N30LR][ID:nL3E6NA0BJ]
PHILIPPINES RELAXES FOREX RULES IN RESPONSE TO INFLOWS
* On Nov. 17 the central bank says it will use measures such as building up foreign exchange reserves and additional bank regulations to deal with foreign inflows.
* Approves six measures in late October, involving higher
ceilings for residents' foreign exchange purchases and outward
investments, and encouraging foreign debt prepayments by the
private sector -- moves aimed at encouraging outflows of capital
and dampening a peso currency
* Bank to stay active in market as peso
-- Story links: [ID:nSGE6AG058][ID:nSGE69R0EK] [ID:nSGE69R0I4]
COLOMBIA INTRODUCES DOLLAR PURCHASES, STRUCTURAL MEASURES
* Finance ministry says on Nov. 17 it will only use external
financing in 2011 to meet outside obligations to ease pressure
on peso
* Central bank says on Oct. 29 it is buying at least $20 million daily until at least March 15.
* Government kept $1.5 billion abroad last year, which included $1.4 billion in government dividends from state oil firm Ecopetrol.
* Plans to possibly hedge up to $3.7 billion in external debt service payments in 2011.
-- Story links: [ID:nN29291838] [ID:nN16108112] [ID:nN02213742]
THAILAND TAXES FOREIGN BOND INVESTORS
* Thailand imposes 15 percent withholding tax on interest and capital gains earned by foreign investors on Thai bonds from Oct. 13, 2010.
* Central bank says on Nov. 24 would consider further measures including a Tobin-style tax on international transactions.
-- Story links: [ID:nL3E6MO0SA] [ID:nSGE69B0A6] [ID:nSGE6970DX]
MEXICO ESCHEWS INTERVENTION, PESO SET TO OUTPERFORM
* Central bank buying $600 million per month by selling dollar put options as a means to build up its reserves.
* Says capital controls do not work.
* Mexican peso
* Strategists see intervention measures across Latin America boosting attraction of free-floating Mexican peso.
-- Story links: [ID:nN10261374] [ID:nN15182353] (Compiled by Rachel Armstrong, Andrew Torchia)