The New Taiwan dollar lost more ground to the greenback in tandem with continued weakness in the yen yesterday, with the central bank largely staying on the sidelines, dealers said.
The local unit breached the NT$35.00 level against the US dollar and was likely to remain under pressure if the yen continues to weaken beyond ?130.00 per greenback, they said.
The central bank was seen selling the US dollar around the local unit's intraday lows of NT$35.02 to NT$35.05 to contain the sharp volatility, dealers said.
The New Taiwan dollar closed at NT$35.021 against the greenback, after touching a low of NT$35.050, on total turnover of US$334 million. It closed Monday at NT$34.970.
"As in recent sessions, the central bank let the local currency determine its own direction, which has been mostly subjugated to the yen," a local forex dealer said.
"Turnover was really sufficiently limited. While importers and banks continued to build their US dollar positions, there seemed to be just modest outward remittances by foreign investors."
The dealer said the NT dollar looked poised to stay under pressure in the short run with Japanese officials predicting further yen depreciation beyond the ?130 level.
But the local unit is likely to soon retest the intraday low of NT$35.20 it hit last week if the yen keeps falling, another dealer said.
"The central bank remains unlikely to intervene until it sees the risk of things getting out of hand," the dealer added.
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