The New Taiwan dollar yesterday fell against its US counterpart, impacted by Taiwan President Chen Shui-bian's (
"The NT dollar plummeted this morning on worries that a further deterioration in cross-strait relations is approaching," a dealer with a local bank told the Taipei Times yesterday.
But the nation's central bank yesterday tried to play down the negative impact of Chen's remarks, saying that China's brisk response to the remarks at around noon yesterday, didn't have a significant impact on the market.
"The weakening NT dollar was impacted by a generally stronger US dollar against the major Asian currencies," said Chou A-ting (
The NT dollar opened at NT$33.723 against the greenback and was traded between NT$33.723 and NT$33.980 throughout the session. Turnover totalled US$880.5 million, up from last Friday's US$653 million.
Chou said the exchange rate of the New Taiwan dollar against its US counterpart was not very abnormal yesterday, compared with the world's major currencies.
"The New Taiwan dollar lost about 0.3 percent against the US dollar yesterday, compared to the euro's drop of 0.54 percent against the greenback, the Japanese yen's 0.23-percent fall, and the Korean won's 1.13-percent loss," he said.
Chou admitted that the central bank did intervene in the market yesterday -- a rare action that the bank has never publicly admitted to.
He added that the bank will continue stepping into the market to prevent a sharp fall in the NT dollar's exchange rate -- should the local currency be influenced by non-economic factors, Chou said.
According to a dealer with a local bank, the central bank was the major buyer of the NT dollar yesterday.
"It bought at least US$400 million's worth to prop up the NT dollar level during the day. It would not let the NT dollar drop to around NT$34.1 to one US dollar," the dealer said.
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