Tue, Jan 06, 2009 - Page 12 News List

NT dollar drops on news that exports may slump further

BLOOMBERG

The New Taiwan dollar fell yesterday for the first time in seven trading days, breaking its longest winning streak since March, on speculation a global recession would lead to further declines in the island’s exports.

The currency had its first annual loss in three years last year as the US, Japan and Europe slipped into their first simultaneous recessions since World War II. Taiwan’s overseas sales tumbled the most in seven years last month, economists forecast in a Bloomberg News survey before a government report tomorrow.

‘BAD NEWS’

“It’s very bad news all around,” said Thio Chin Loo, a senior currency strategist at BNP Paribas SA in Singapore. “I don’t think anybody’s expecting a complete rebound in Taiwan exports because the economic slowdown is broad-based. The markets will be very nervous and conservative.”

The NT dollar fell 0.4 percent to NT$33.005 against the US currency as of the 4pm close on Sunday, after declining 1.3 percent last year, Taipei Forex Inc said. It earlier dropped as much as 0.9 percent to NT$33.16, the weakest since Dec. 24.

The currency will likely weaken to NT$34 by the end of the first quarter, the median forecast of analysts surveyed by Bloomberg News showed.

CONTRACTIONS

Asian economies are slowing as demand slumps. Singapore’s government on Friday lowered its economic growth projection for this year to between minus 2 percent and plus 1 percent, and reports this month showed South Korean exports and Chinese manufacturing contracted last month.

Taiwan’s overseas sales fell by 31 percent last month from a year earlier, after sliding 23 percent in November. Export orders, indicative of shipments in one to three months, plunged by a record 29 percent in November, official figures showed.

This story has been viewed 1550 times.
TOP top