Following a volatile week, the New Taiwan dollar yesterday dropped NT$0.29, or 0.97 percent, to close at the day’s low of NT$29.80 against the US dollar, in line with other major Asian currencies.
The NT$0.29 decline on Taipei Forex Inc represented the largest fall in a single day since Jan. 28, when it dropped by NT$0.31 against the greenback.
On the smaller Cosmos Foreign Exchange market, the NT dollar closed at NT$29.69 yesterday.
Turnover was US$2.05 billion yesterday, with US$1.45 billion on Taipei Forex and US$603 million on the Cosmos.
The NT dollar has fluctuated sharply over the past week, with the currency moving as high as NT$29.341 against the US dollar on Thursday, before dropping to the week’s low of NT$29.80 yesterday.
“The NT dollar still has room to further depreciate against the US dollar to match the depreciation of the Japanese yen and the South Korea won,” private think tank Yuanta-Polaris Research Institute (元大寶華綜合經濟研究院) said in a research note.
The yen yesterday weakened 2.51 percent to close at ￥101.37 against the US dollar, while the won fell 1.37 percent to 1,106.1 against the greenback, according to data provided by the central bank.
Yuanta-Polaris said the bank might want the NT dollar to fall further to help boost exports and maintain economic growth, in light of sluggish domestic demand.
The won fell to a three-month low at one point yesterday, a day after the Bank of Korea unexpectedly cut its benchmark interest rate by 0.25 percentage points.
However, the central bank said in a statement yesterday that the level of Taiwan’s interest rates were much lower than those in South Korea, an indication that the bank has no intention of joining Seoul and cutting its rates.
The bank’s comments came after former top Japanese currency official Eisuke Sakakibara, known as “Mr Yen,” a day earlier suggested that Taiwan could also adopt quantitative easing measures.