The New Taiwan dollar fell for a second day and bonds declined on concern the central bank would introduce measures to deter speculators from betting on gains in the currency, which reached a one-year high this month.
The government may buy back at least NT$20 billion (US$619 million) in bonds next year to rejuvenate the market and prevent foreign investors from parking speculative funds in debt, the Chinese language Economic Daily News reported yesterday.
The NT dollar weakened 0.2 percent to NT$32.290 against its US counterpart as of 4pm, Taipei Forex Inc said.
The central bank said in March it had revised regulations on government bonds to allow repurchases of notes that aren’t traded frequently. Some foreign investors have put money into such debt, Ernest Lee, a fixed-income securities trader at Mega Securities Co (兆豐證券) in Taipei.
Ten-year government bonds dropped for a second day. The yield on the 1.375 percent note maturing in September 2019 climbed three basis points, or 0.03 percentage points, to 1.435 percent, said GRETAI Securities Market, Taiwan’s biggest exchange for bonds. The price fell 0.2388 or NT$238.8 per NT$100,000 face amount, to 99.4452.
Meanwhile, the interest the central bank pays on lenders’ reserves that come from demand deposits was reduced to 0.165 percent from 0.173 percent, while the rate for funds from time deposits dropped to 0.767 percent from 0.771 percent starting yesterday, the central bank said in a statement.
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