Taiwan Insurers Cut Most Offshore Hedges Before Dollar Selloff

Some of Taiwan’s largest life insurers unwound almost all of their offshore currency hedge positions ahead of the US dollar’s recent selloff, as a regulatory overhaul eases the need to protect against swings in the Taiwan dollar, according to people familiar with the matter.

The reduction of short US dollar–Taiwan dollar positions via non-deliverable forwards has largely been completed, with most of the activity taking place last month, the people said, asking not to be identified because the matter is private. The insurers have now shifted their focus to unwinding onshore hedging positions, one of the people said.