The New Taiwan dollar fell back slightly from a five year high against the greenback yesterday after aggressive intervention by the central bank and with traders turning cautious ahead of the release of US trade data for January, dealers said.
But further intervention by the central bank could mean more risks of capital losses, Lehman Brothers Inc warned in its latest research report released earlier this week.
"Most people chose to keep to the sidelines ahead of the release of the US trade figures, despite a consensus expectation that the US trade deficit would widen further to US$58 billion," a dealer said on condition of anonymity.
The NT dollar slid NT$0.03 to end at NT$30.820 against the US currency yesterday on the Taipei foreign exchange market. Turnover fell to US$621 million from a massive US$1.75 billion in the previous session.
A panic sell-off of US dollar holdings by local exporters was prevented by the central bank's cooperation with other Asian central banks to prevent a drastic appreciation of regional currencies on Thursday, he said.
He estimated that the central bank spent around US$600 million to buy US dollars to limit the NT dollar's rise.
He also attributed the NT dollar's slight decline to overseas fund managers' slower purchase of local shares. Foreign investors bought a net NT$473 million's worth of local stocks yesterday instead of several billions per day in the past months.
Another dealer, who also requested not to be named, said the central bank's move has effectively reined in the local currency's appreciation.
"The central bank's determination to steer the NT dollar's rise at a measured pace has snuffed out some wild speculation about a steep revaluation," he said.
With the central bank closely monitoring the exchange rate, the local currency is unlikely to breach the next psychological level of NT$30.5 against its US counterpart before the end of the month, he said.
Asian central banks have apparently effectively curbed the steep appreciation of currencies in the region, although further intervention could increase the central banks' risk of suffering capital losses if the greenback continues its slide, Lehman Brothers Inc warned.
"If Asian central banks continue to recycle global savings to finance the US current account deficit at the same rate as in 2004, they will become heavily exposed to any major slide in the US dollar," Lehman Brothers economist Rod Subbaraman said in the firm's latest report.
A 30-percent decline in the value of the US dollar in terms of local currencies at the end of next year would result in capital losses equivalent to over 20 percent of GDP for the monetary authorities in Singapore, Malaysia and Taiwan, he said.
The central bank's intervention in the local foreign exchange market recently came into the spotlight in the political arena and academic circles.
People First Party Legislator Christine Liu (
"That should be a last resort when the market collapses," Liu said.
However, Wu Chung-shu (吳中書), an Academia Sinica research fellow, said he fully supports the central bank's measures, as the inflation risk is expected to be low this year.
Wu said the central bank should step in at the proper time to prevent the local currency from appreciating sharply, which could stifle Taiwanese exports.
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
RECORD-BREAKING: TSMC’s net profit last quarter beat market expectations by expanding 8.9% and it was the best first-quarter profit in the chipmaker’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which counts Nvidia Corp as a key customer, yesterday said that artificial intelligence (AI) server chip revenue is set to more than double this year from last year amid rising demand. The chipmaker expects the growth momentum to continue in the next five years with an annual compound growth rate of 50 percent, TSMC chief executive officer C.C. Wei (魏哲家) told investors yesterday. By 2028, AI chips’ contribution to revenue would climb to about 20 percent from a percentage in the low teens, Wei said. “Almost all the AI innovators are working with TSMC to address the
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”