Tue, Jul 13, 2010 - Page 12 News List

NT dollar reverses gains on bank sell-off

BLOOMBERG

The NT dollar reversed gains on speculation the central bank sold the currency in late trading to curb strength, according to a trader familiar with the monetary authority’s operations.

The currency climbed as much as 0.3 percent yesterday after the Ministry of Economic Affairs said last week GDP may rise as much as 8 percent this year, more than the 6.14 percent predicted by the statistics bureau in May. Investors based abroad bought NT$6.7 ­billion (US$208 million) more Taiwan shares than they sold yesterday, adding to net purchases of US$661 million last week, according to stock exchange data.

“The economy is doing well and some funds from overseas are being parked in short-term debt,” helping lift the NT dollar, said Tommy Huang, a fixed-income trader at Taiwan International Securities Corp (金鼎證券), adding that “if it rises too much, the central bank may intervene.”

The local currency fell 0.4 ­percent to close at NT$32.25 against its US counterpart, according to Taipei Forex Inc. It touched NT$32.001 on July 9, the strongest level since June 28.

The central bank has intervened to curb the NT dollar in the past three months, according to traders, who declined to be identified.

Meanwhile, the yield on the 0.875 percent bond maturing January 2015 was little changed at 1.05 percent, according to Gretai Securities Market, the nation’s biggest exchange for bonds.

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