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NT dollar gains on speculation over converted earnings

The New Taiwan dollar yesterday gained on speculation that the nation's exporters converted their overseas earnings for month-end settlement.

The local currency also ended four days of declines as the yen rebounded from a four-year low against the US dollar reached on Jan. 29.

"The Taiwan dollar could see pressure from exporters for their typical end-month demand," said Thio Chin Loo, senior currency analyst at BNP Paribas in Singapore. "Also, the dollar looks toppish against the yen and a rising yen may drag the Taiwan dollar higher as well."

The NT dollar advanced by NT$0.024 to close at NT$32.949 against the US dollar on the Taipei Forex Inc. Turnover was US$966 million.

"The recent Taiwan dollar depreciation is driven by market forces, reflecting supply and demand," central bank Governor Perng Fai-nan (彭淮南) said on Tuesday.

"We will maintain flexibility," he said.

Traders said exporters were selling US dollars to meet cash needs at the end of last month and just before the Lunar New Year holiday. The Lunar New Year begins on Feb. 18.

Perng said on Tuesday that the central bank would ensure demand for cash is met in the run-up to the Lunar New Year holiday.

The NT dollar had a second monthly loss, down 1.1 percent, as overseas investors sold more of the nation's stocks than they bought every day since Jan. 26.

Foreign investors sold a net NT$3.596 billion (US$109 million) in Taiwan stocks yesterday, Taiwan Stock Exchange's data showed.
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