Fri, Nov 19, 2004 - Page 1 News List

NT dollar makes a strong advance against greenback

STAFF WRITER , WITH BLOOMBERG

The New Taiwan dollar had its largest gain in more than a year after the benchmark TAIEX rose to its highest in more than five weeks amid increasing overseas fund inflows.

The NT dollar rose NT$0.239 to close at NT$32.42 against its US counterpart on the Taipei foreign exchange market. It was the unit's biggest advance since Sept. 22 last year and the closing level was the strongest since March 9, 2001.

REWEIGHTING

Turnover was US$1.13 billion, up from US$702 million in the previous day, as money from overseas investors continued to flow into the local bourse, after the positive reweighting announcement by Morgan Stanley Capital International Inc on Wednesday.

Foreign institutional investors purchased a net NT$11.5 billion (US$355 million) of local equities yesterday alone and have poured NT$114.5 billion into the local bourse so far this month, according to Taiwan Stock Exchange Corp.

"Fund inflows have been coming in and supporting the NT dollar," said Lo Chung, assistant manager of the treasury at Chinese Bank in Taipei.

The currency also gained on speculation the nation's central bank will allow its appreciation in line with other Asian currencies may extend its advance.

APPRECIATION

"Within Asia, as long as a lot of currencies are appreciating at the same time," the central bank may let the NT dollar strengthen, said Steven Chang, vice president of global markets in Hong Kong at State Street Bank & Trust Co.

The central bank yesterday said the exchange level of the NT dollar is quite stable, compared to other major currencies.

The bank's statistics showed that the NT dollar rose about 0.74 percent against the US dollar yesterday, compared to the South Korean won's 1.5-percent surge, the Japanese yen's 1.25-percent growth, the euro's 0.56-percent increase and the Singaporean dollar's 0.23-percent rise.

The currency earlier climbed after a Chinese-language newspaper report cited George Chou (周阿定), director general of the central bank's foreign exchange department, as saying the nation's exports haven't been affected by the currency's gain.

The central bank denied the report later yesterday, saying that Chou didn't make the comments. It didn't elaborate.

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