NT dollar plummets to seven-year low in Taipei

By Crystal Hsu  /  Staff reporter

Fri, Jan 15, 2016 - Page 13

The New Taiwan (NT) dollar yesterday closed down 0.35 percent, or NT$0.117, at a seven-year low of NT$33.742 against the greenback in Taipei trading, as the currency joined the depreciation of the region’s currencies, traders said.

It was the 23rd trading session that the NT dollar traded below NT$33 against its US counterpart, suggesting it might not bounce back in the foreseeable future, as the central bank dislikes excessive volatility.

The depreciation came after the TAIEX lost 1.04 percent, or 81.73 points, to 7742.88 on light volume of NT$81.78 billion (US$2.43 billion), taking its cue from the overnight tumble on Wall Street, Taiwan Stock Exchange data showed.

Foreign institutional players slashed their positions in local shares by NT$3.74 billion, while mutual funds and proprietary traders cut their holdings by NT$201.78 million and NT$94.45 million respectively.

“A general pessimistic sentiment has gripped markets across the world, though there are no new and major downside risks unfolding,” said Tai Hui (許長泰), JPMorgan Asset Management’s Hong Kong-based chief strategist on Asia.

Combined turnover on the Taipei Foreign Exchange and the Cosmos Foreign Exchange markets amounted to US$1 billion, according to data from the two exchanges.

The local currency could next challenge the NT$34 mark as there is no reason for it to appreciate, traders said, citing crude oil price volatility and geopolitical tensions.

In times of uncertainty, investors tend to take refuge in the US dollar, traders said, adding that except for exporters, no one would be selling the greenback.

Taiwan’s export-reliant economy failed to lend any support either, with GDP growth likely to decline in the current quarter due to the absence of a catalyst and a relative high base last year, economists said.