Fri, Mar 04, 2005 - Page 10 News List

NT dollar continues to rise -- but at a slower pace


The New Taiwan (NT) dollar yesterday continued to gain ground against its US counterpart, but at a slower pace after the TAIEX fell and the greenback recovered slightly against other major currencies such as the euro and yen.

The NT dollar rose NT$0.015 to close at NT$30.863 against the US dollar in Taipei. Turnover was US$1.07 billion, down from US$1.302 billion the previous day.

The nation's exporters continued to sell the greenback to reduce possible foreign exchange losses, but the local currency gained support on speculation that overseas investors, whose stock purchases helped make the currency the third-best performer in Asia this year, will buy shares in local banks.

The government will sell shares in Chang Hwa Commercial Bank (彰化銀行), the Bank of Overseas Chinese (華僑銀行), Taiwan Cooperative Bank (合作金庫) and other lenders, said Minister of Finance Lin Chuan (林全) overnight in New York.

Lin is in the US as head of a delegation to promote foreign investment in state-run banks.

"Foreign investors are focused on the value of the currency and local asset markets," said Callum Henderson, global head of currency strategy in Singapore at Standard Chartered Plc. "This news will presumably exacerbate the increase in portfolio inflows."

Standard Chartered expects the NT dollar to rise to NT$30.70 this month and NT$30.40 by the end of June, Henderson said.

Still, the recent surge in the value of the NT dollar has worried a local business tycoon who said the appreciation in the local currency is a "heavy burden," and is hurting competitiveness abroad.

"Wages are high in Taiwan ... and the substantial revaluation of the NT dollar will only add difficulties to companies doing business here,"cable television station USTV reported yesterday, citing Wang Yung-tsai (王永在), vice chairman of Formosa Plastics Group (台塑).

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