The central bank may allow the New Taiwan dollar to strengthen against the US dollar in the next 12 months to help mitigate imported inflationary pressures after exports showed signs of recovery, Barclays Capital said yesterday.
The British banking group expects the NT dollar to rise to NT$28.5 versus the greenback in the coming 12 months after picking up 3.35 percent so far this year.
“We believe the government will tolerate a stronger NT dollar to lean against imported price pressures, especially when there are signs that the trade surplus will widen in the current quarter on the back of stronger electronics exports,” the foreign brokerage said in a statement.
Barclays attributed the expected improvement in trade surplus to increased exports of handsets and PCs on new product launches such as Apple Inc’s iPhone 5 and HTC Corp’s (宏達電) One series.
Taiwan’s warming ties with China remains the longer-term driver of NT dollar appreciation, in view of more foreign direct investment flows into Taiwan and the rising potential of yuan-based businesses, Barclays said.
In addition, the boom in tourist arrivals from China has generated a sense of optimism in the real-estate market, the brokerage said.
Chinese visitor arrivals in the first nine months of the year grew 54 percent year-on-year, boosting Chinese arrivals from 1.8 million last year to 2.7 million this year, with the figure likely to hit 4.5 million by 2014, Barclays said.
“As such, foreign exchange earnings from Chinese tourists could hit US$8 billion (NT$234.44 billion) by 2014, from US$4.5 billion last year,” increasing the services-account surplus of the balance of payments after years of deficits, it said.