With foreign funds flowing into Asian currencies in expectation of the Chinese yuan appreciating, the New Taiwan dollar yesterday continued its recent rise against its US counterpart, although growth appeared to have slowed.
At the close of trading in Taipei the NT dollar had risen by NT$0.085, or 0.27 percent, to NT$31.375 — its highest level since Aug. 18, 2008, when it hit NT$31.307 against the greenback.
“Funds are flowing into Asia,” Yang Kung-yi, a currency trader at Shanghai Commercial & Savings Bank (上海商銀) in Taipei, told Bloomberg Newswire yesterday. “Exporters are active” in selling the greenback, he said.
The local currency climbed NT$0.121, or 0.38 percent, to NT$31.339 during the trading session, but edged down as of the 4pm close following the central bank’s intervention, proof that the bank wanted to prevent the NT dollar from appreciating too fast, another trader said by telephone.
“Based on the current situation, the central bank tends to let the local currency appreciate at a moderate pace,” said a trader at a local bank on condition of anonymity, adding that the trend is for the NT dollar to continue to strengthen.
Turnover was US$1.139 billion at Taipei Forex Inc. Including turnover at the smaller Cosmos Foreign Exchange Inc, total trading transactions were US$1.52 billion yesterday.
Altogether, the NT dollar has risen NT$0.13, or 0.41 percent, this week and has climbed NT$0.325, or 1.02 percent, so far this year, the trader said, adding that whether the local currency will rise beyond NT$31.2 will depend on the central bank’s attitude.
Last month, central bank Governor Perng Fai-nan (彭淮南) rebutted an accusation by a US academic that the NT dollar had been undervalued and manipulated, citing various figures to support his assertion.
At the time, Perng said that the local currency had appreciated by 10.33 percent against the greenback between March 2 and March 25 and ad risen 24.2 percent against the South Korean won since 2007.
If the NT dollar had been manipulated, it couldn’t have risen so much against different currencies in such a short time, he said.
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