NT dollar weaker than NT$31 as foreign funds exit

By Crystal Hsu  /  Staff reporter

Tue, May 14, 2019 - Page 12

The New Taiwan dollar yesterday fell 0.4 percent, or NT$0.124, against the US dollar to NT$31.082, a seven-month low, as foreign funds fled the local market, dealers said.

It was the first time that the NT dollar weaker than NT$31 per US dollar since October last year, when foreign funds exited Asia at the height of the US-China trade spat.

The market is likely seeing a repeat of the global fund movement after Washington on Friday raised tariffs on US$200 billion of Chinese goods from 10 percent to 25 percent, the dealers said.

The NT dollar ended yesterday at its lowest level, with turnover widening to US$1.106 billion, Taipei Forex Inc data showed.

The retreat came after the TAIEX tumbled 1.44 percent to 10,558.29 as traders turned conservative about the earnings outlook at local firms which could be affected by the trade spat.

Taiwan is home to the world’s largest suppliers of electronic parts used in smartphones, laptops and other technology devices. Many companies have manufacturing facilities in China, making them susceptible to the dispute.

Foreign investors cut holdings in local shares by a net NT$4.07 billion, while mutual funds reduced their holdings by NT$758 million, the Taiwan Stock Exchange said.

The currency depreciation could spread to other Asian nations due to their heavy exposure to global trade, the dealers said.

Asia last week saw a net fund outflow of US$1.1 billion, the fastest in 22 weeks, JPMorgan Asset Management Taiwan said.

The central bank said that the NT dollar is relatively stable compared with major currencies.

The South Korean won yesterday softened 0.88 percent, the Chinese yuan weakened 0.7 percent and the Indonesian rupiah fell 0.64 percent, the bank said.