Despite concern over global money markets in the past 24 hours, the nation's central bank said yesterday that the domestic financial market remained stable and was not facing a liquidity crisis.
"Despite fluctuations in the global financial markets today and moves by some central banks [to counter the threat from US subprime mortgage woes], the domestic financial market remains calm," the central bank said in a statement issued yesterday.
The central bank cited two reasons underlining its confidence in the nation's money markets.
First, it said that the call rate -- the interest on overnight interbank loans -- dropped by 0.9 basis points to 2.002 percent yesterday, from the previous day's 2.011 percent, indicating ample liquidity in the financial system.
The Taiwan Interbank Money Center, however, said that the interbank rate rose as much as 3.9 basis points yesterday to 2.05 percent -- the highest intraday level since Aug. 6.
Second, the central bank said that the exchange rate of the NT dollar also appeared relatively stable compared to other major currencies yesterday.
The NT dollar edged down NT$0.08 or 0.25 percent to close at NT$32.965 against the greenback on the Taipei foreign exchange.
This compares with a 0.37 percent drop in the Malaysian ringgit, a 0.97 percent fall in the Korean won and a 0.53 percent decline in the Singaporean dollar, central bank data showed.
The Australian dollar also fell 1.95 percent yesterday, while the Japanese yen rebounded by 0.85 percent, it added.
For the week, the NT dollar was down 0.3 percent against the US dollar.
The central bank did not say whether it had intervened in the forex market yesterday, after its counterparts in Malaysia, Indonesia and the Philippines sold US dollars to shore up their currencies.
But the central bank reiterated that it would monitor the NT dollar for signs of any fallout from the US subprime market woes.
The central bank also said that the rise in the interbank rate for US dollar loans was a reflection of an upswing in international markets, adding that there was no shortage of liquidity for the local US dollar interbank market.