Tue, Sep 22, 2015 - Page 14 News List

New Taiwan dollar drops 0.84 percent to two-week low

By Crystal Hsu  /  Staff reporter

The New Taiwan dollar weakened 0.84 percent, or NT$0.276, to close at a two-week low of NT$32.939 against the greenback in Taipei trading yesterday, as foreign investors slashed their holdings of local shares, the central bank said.

The pace of decline was smaller than that of the won and the Australian dollar, which fell 1.01 percent and 0.95 percent respectively against the greenback, the central bank said in a statement.

The central bank blamed the NT dollar’s depreciation on foreign investors, who cut their shareholdings on the Taiwan Stock Exchange and the Taipei Exchange by a net NT$11.43 billion, it said.

Combined turnover on the Taipei Foreign Exchange and the Cosmos Foreign Exchange markets totaled US$1.08 billion, slightly lower than Friday’s US$1.17 billion, suggesting normal fund movement, a currency trader at a local bank said.

However, the trader attributed the NT dollar’s retreat mainly to intervention by the central bank, as the local currency hovered at about NT$32.5 until the last 15 minutes.

“Poor export order data likely drove the central bank to step in,” the trader said on condition of anonymity.

Export orders contracted 8.3 percent last month from a year earlier, widening from a 5 percent downturn in July, the Ministry of Economic Affairs said.

Many have called on the monetary policymaker to lower interest rates during its board meeting on Thursday to help stimulate growth.

“A rate cut of 12.5 basis points would be enough to send a message of monetary easing without causing unnecessary repercussions,” state-run Hua Nan Securities Co (華南永昌投顧) chairman David Chu (儲祥生) said.

The currency dealer disagreed, saying the central bank is holding rates unchanged at 1.875 percent because of imports’ impact on the nation’s foreign trade.

However, the central bank might keep the NT dollar weak to help boost export competitiveness, the trader said, adding that a soft NT dollar would also help lift bottom lines for exporters.

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