The New Taiwan dollar was little changed this week as accelerating inflation added to the case for policymakers to favor a stronger currency, countering concerns over slowing economic growth. Government bonds advanced.
The consumer-price index climbed 1.77 percent from a year earlier last month, compared with 1.74 percent in May, official data showed on Thursday. Most Asian stocks retreated on Friday after interest-rate cuts in Europe and China failed to assure investors the moves would be enough to boost economic growth.
“External factors are hurting the island’s exports, but at the same time there’s the risk of accelerating inflation,” said Ma Tieying, an economist at DBS Bank Ltd in Singapore. “These two factors combined should have a neutral effect on the currency.”
The NT dollar on Friday closed at NT$29.922 against its US counterpart, compared with NT$29.900 last week, and slipped 0.1 percent from Thursday, according to Taipei Forex Inc. It touched NT$29.740 on Thursday, the strongest level since June 21.
Official data are expected to show tomorrow that exports rose 2.3 percent last month from a year earlier, after a 6.3 percent slump the previous month, according to the median estimate of economists in a Bloomberg survey.
The Philippine peso led gains in Asian currencies this week on optimism central banks in the world’s biggest economies will boost efforts to arrest a global slump.
The peso reached a four-year high as Standard & Poor’s upgraded the debt rating for the Philippines, while the yuan fell on speculation China would favor a weaker currency to support exports. The IMF will cut its estimate for worldwide growth this year, IMF Managing Director Christine Lagarde said yesterday.
The peso gained 0.9 percent from a week ago to 41.792 per US dollar in Manila, according to Tullett Prebon PLC. South Korea’s won advanced 0.7 percent to 1,137.99 and Thailand’s baht rose 0.4 percent to 31.63, according to data compiled by Bloomberg. The rupee rose 0.3 percent to 55.4550. The yuan dropped 0.16 percent, the biggest five-day loss in a month, to 6.3644. Nine of the 11 most-traded Asian currencies declined on Friday.
Global funds pumped US$461 million into the Indonesian, Philippine and South Korean stock markets this week through Thursday, exchange data show.
The rupee touched its strongest level since May as global funds bought US$855 million more Indian stocks than they sold in the first three days of the week, set for the biggest weekly net purchases since the period ended on March 16, according to exchange data.
Elsewhere, Indonesia’s rupiah rose 0.3 percent from a week ago to 9,405 per dollar, while Malaysia’s ringgit slid 0.3 percent to 3.1788.