Taiwan’s soaring trade surplus means it is likely to stay on the U.S. Treasury’s foreign exchange watchlist when the next report is released, continuing the scrutiny on the island’s currency policy.

The U.S. decided not to designate Taiwan as a currency manipulator in the April report, even though its trade and current account surpluses and intervention in currency markets meant it met the thresholds for that label. Since then, the imbalances have only intensified, with the trade surplus soaring on higher prices and rising demand for its exports of electronics and computer chips.

Monthly goods shipments from Taiwan hit new records four times so far this year, driving up the current account surplus, which was the second highest on record in the April-June period. The U.S. foreign exchange report will look at the 12 months through the end of June 2021, a period when that surplus was the highest on record compared to the size of Taiwan’s economy.

The Treasury said in April it would “commence enhanced bilateral engagement” with Taiwan over the issue of the currency, although the central bank in Taipei pushed back against the listing, denying it was seeking to gain an unfair trade advantage. Even so, the central bank has slowed its daily interventions in currency markets and the local dollar has gained 1.3% so far this year versus the greenback, making it Asia’s top performer.

On the third criteria, the central bank’s net foreign-exchange purchases in the second half of 2020 were $35.2 billion, which was already much higher than the 2% of GDP criteria set by the U.S. The data for 2021 will be released next year.

“It is likely the central bank will allow more flexibility in the Taiwan dollar and refrain from smoothing the FX market as frequently as before,” said Gary Ng, Hong Kong-based senior economist with Natixis SA, adding the currency could have more upside now than in the past.

Other economists don’t see the listing by the U.S. as so important.

Taiwan will probably stay on the watchlist when it is released later this year, but the report is just short-term noise, and there are other factors that influence foreign exchange more, according to Christopher Wong at Malayan Banking BHD in Singapore. The strong export performance will provide support for the economy and the Taiwan dollar, he said.