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Forex turnover hits US$3.24bn mark

The Taipei Foreign Exchange Inc chalked up record turnover of US$3.24 billion yesterday, thanks largely to foreign investors' stock purchases.

Including the smaller Yuantai Foreign Exchange Inc's US$692 million turnover, the total volume of transactions was US$3.932 billion.

The NT dollar surged to an intraday high of NT$32.175 around noon, but gave up some gains to close at NT$32.260 against the greenback, up NT$0.110 from the previous close.

The last time turnover approached yesterday's level was when transactions totaled US$3.169 billion on Oct. 1, 1987. At that time, traders snatched up the NT dollar after the lifting of a 40:1 peg to the US dollar.

"The volume was a bit larger than average, but the market was calm and orderly," said Duann Jin-sheng (段金生), director of the central bank's foreign exchange bureau.

Duann declined to comment on whether the central bank had intervened to put a brake on the NT dollar's surge.

In addition to inward remittances registered by the custodian banks of foreign investment banks, the selling pressure on the US dollar was largely the result of a bearish outlook amid a likely slowdown in the US economy as a result of the subprime mortgage crisis, dealers said.

The US dollar lurked near a seven-week low against the euro and the yen on the London market amid expectations that the US Federal Reserve would cut interest rates later this month to boost the economy.

US dollar buy orders placed by government-owned banks which might have acted on behalf of the central bank kept the NT dollar in check, said dealers, who also spotted outward remittances for oil purchases.

The TAIEX surged 225.43 points, or 3.13 percent, to 8,428.84, with turnover totaling NT$210.227 billion, up from NT$109.330 billion the previous day, the Taiwan Stock Exchange's tallies showed.

The benchmark index has risen 4.98 percent in the last two days following the Chinese Nationalist Party's (KMT) victory in Saturday's legislative elections.

All eight major sectors advanced yesterday, though financial shares were the biggest gainers with an average rise of 6.68 percent. Technology shares, led by panel-making stocks, rebounded following Wall Street's overnight recovery, SinoPac Securities Corp (永豐金證券) analyst George Hung said in a client note yesterday.

Foreign investors yesterday bought a net NT$22.08 billion in Taiwanese stocks, following a net purchase of NT$22.92 billion on Monday.

Domestic institutional investors, including both investment trust firms and proprietary traders, collectively bought a net NT$5.42 billion in Taiwanese stocks yesterday. They placed a net purchase of NT$1.35 billion on Monday.
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