The New Taiwan dollar rose to its highest in four and a half years on speculation that overseas buyers will increase demand for the currency as they raise their investments in Taiwanese stocks.
The NT dollar gained NT$0.133, or 0.4 percent, to close at NT$31.199 against its US counterpart on the Taipei foreign exchange market.
That figure was the highest close since Sept. 15, 2000.
As of yesterday, fund managers abroad bought a net NT$92 billion (US$2.9 billion) of Taiwan's shares this month, compared with net sales last month, according to stock exchange figures.
The continued appreciation in local currency has caused domestic textile makers to publicly petition the central bank to intervene in the foreign exchange market.
In a statement released on Tuesday night, textile makers complained that a stronger NT dollar is eroding their competitiveness and earnings as they compete against their Chinese rivals in the US and Europe.
The NT dollar also strengthened yesterday after the central bank said in a statement that it hasn't been selling the US currency.
"The [central] bank has not been selling US dollars. Foreign media reports are inconsistent with facts," the bank said.
The remark came as a Chinese-language business daily reported yesterday that "according to foreign media reports, the US dollar declined sharply as Taiwan's central bank and the Bank of Korea plan to sell the US currency."
Earlier in the day, the Bank of Korea said the market had misunderstood reports on the issue. It insisted that it had no plan to sell some of its dollar forex reserves.
At the same time, the bank said it did plan to diversify its forex reserves in the interest of securing a better investment return.
"That they haven't been selling the dollar doesn't mean they won't sell," Tommy Ong, vice president of the treasury and markets at DBS Bank (Hong Kong) Ltd, a unit of Southeast Asia's biggest lender by assets.
"They want to avoid a freefall of the US dollar because obviously they have a pretty large portion of the dollar in their reserves," he said.
The NT dollar may rise to NT$30.25 against the greenback in about a month, Ong said.
Lehman Brothers said yesterday in a report, Taiwan's Temporary Pause, that "Faced with renewed upward pressure on the NT dollar, we judge that Taiwan's central bank would once again [at least initially] intervene heavily in the forex market."
The NT dollar pared gains of as much as 0.6 percent on speculation the central bank sold its some of its currency holdings, said Joseph Lee, a currency trader at Cathay United Bank (
``There was speculation that the authority sold the Taiwan dollar just to slow down its gains,'' he said.
George Chou (
The NT dollar's gains may also encourage some exporters to convert overseas earnings on concern the currency's advance may accelerate, said Gary Huang, a currency trader at Union Bank of Taiwan (
A strengthening currency reduces the amount of foreign-exchange proceeds such companies can get out of their profits.
Mercuries Life Insurance Co (三商美邦人壽) shares surged to a seven-month high this week after local media reported that E.Sun Financial Holding Co (玉山金控) had outbid CTBC Financial Holding Co (中信金控) in the financially strained insurer’s ongoing sale process. Shares of the mid-sized life insurer climbed 5.8 percent this week to NT$6.72, extending a nearly 18 percent rally over the past month, as investors bet on the likelihood of an impending takeover. The final round of bidding closed on Thursday, marking a critical step in the 32-year-old insurer’s search for a buyer after years of struggling to meet capital adequacy requirements. Local media reports
US sports leagues rushed to get in on the multi-billion US dollar bonanza of legalized betting, but the arrest of an National Basketball Association (NBA) coach and player in two sprawling US federal investigations show the potential cost of partnering with the gambling industry. Portland Trail Blazers coach Chauncey Billups, a former Detroit Pistons star and an NBA Hall of Famer, was arrested for his alleged role in rigged illegal poker games that prosecutors say were tied to Mafia crime families. Miami Heat guard Terry Rozier was charged with manipulating his play for the benefit of bettors and former NBA player and
The DBS Foundation yesterday announced the launch of two flagship programs, “Silver Motion” and “Happier Caregiver, Healthier Seniors,” in partnership with CCILU Ltd, Hondao Senior Citizens’ Welfare Foundation and the Garden of Hope Foundation to help Taiwan face the challenges of a rapidly aging population. The foundation said it would invest S$4.91 million (US$3.8 million) over three years to foster inclusion and resilience in an aging society. “Aging may bring challenges, but it also brings opportunities. With many Asian markets rapidly becoming super-aged, the DBS Foundation is working with a regional ecosystem of like-minded partners across the private, public and people sectors
BREAKTHROUGH TECH: Powertech expects its fan-out PLP system to become mainstream, saying it can offer three-times greater production throughput Chip packaging service provider Powertech Technology Inc (力成科技) plans to more than double its capital expenditures next year to more than NT$40 billion (US$1.31 billion) as demand for its new panel-level packaging (PLP) technology, primarily used in chips for artificial intelligence (AI) applications, has greatly exceeded what it can supply. A significant portion of the budget, about US$1 billion, would be earmarked for fan-out PLP technology, Powertech told investors yesterday. Its heavy investment in fan-out PLP technology over the past 10 years is expected to bear fruit in 2027 after the technology enters volume production, it said, adding that the tech would
RSS