The New Taiwan dollar rose to its highest level in four months after the central bank signaled Friday the strengthening currency is not a concern.
The local currency closed at NT$34.845 compared with NT$34.898 Friday against its US counterpart, the strongest closing level since Dec. 20 and the biggest gain since Jan. 7. The unit reached an intra-day high of NT$34.757, also the highest level since Dec. 20.
The turnover totalled US$1.201 billion yesterday, compared with US$1.406 billion in the Friday session.
Central Bank of China Deputy Governor Liang Fa-chin (梁發進) said the New Taiwan dollar gains on Friday were "normal." The statement came after overseas investors put more than NT$30 billion (US$861 million) into the Taiwanese stock market in the last six sessions before yesterday, according to Bloomberg data.
"Continued inflows to the equity market have prepared the background for the Taiwan dollar rise," said Roger Yip, a currency strategist at Bank of America in Hong Kong. "The CBC appeared to have loosened control last week and we expect it to continue to do so."
According to dealers, the central bank has been spotted intervening in the market -- with an estimated of US$600 million to US$700 million -- throughout the session to stop further gains in the local currency.
The TAIEX index has risen more than 16 percent this year, raising optimism that gains in stock prices will further boost demand for Taiwan's stocks, analysts said.
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