The NT dollar hit a 35-month high yesterday as it broke the NT$31 benchmark against the US dollar, thanks to inward remittances combined with speculative selling pressure on the greenback.
The NT dollar surged NT$0.281 to close at NT$30.929, its highest level since March 14, 2005, when it closed at NT$30.832.
Combined turnover at the Taipei Foreign Exchange and the smaller Yuantai Foreign Exchange totaled US$2.442 billion, the eighth-largest on record.
The central bank's weaker-than-expected interventions, a drastic change from the previous trading sessions, raised eyebrows among dealers. But central bank Governor Perng Fai-nan (彭淮南) said the reason was the across-the-board slump of the US dollar.
Approached by reporters as he made his way out of the central bank's trading room, Perng said that since the greenback was hitting record lows against the euro and other major currencies, it made no sense to try to halt the NT dollar's appreciation.
Some dealers had a different interpretation.
"The central bank had to let go so that it doesn't have to raise interest rates too much to combat inflation," a dealer who requested anonymity said in a telephone interview.
Dealers said inflationary pressure is taking a toll on consumer spending in Taiwan, and with imported commodities surging to an all-time high, keeping the NT dollar from reflecting the trend will only add fuel to the fire.
Market watchers are predicting a 0.125 percent interest rate hike at the central bank's next board meeting, scheduled for March 27.
The wholesale price index soared 10.21 percent last month year-on-year and the consumer price index rose by 2.96 percent during the same period.
Dealers said inward remittances continued to flow into the market today, but the volume was moderate.
"I think it's the psychological effect [of the NT dollar's appreciation] that triggered a landslide of sell orders on the greenback from speculators and exporters," said another dealer who also preferred not to be named.
However, he said investors did not cancel their US dollar-denominated time deposits as some speculated they would.
"They simply converted the US dollar savings into other foreign currencies," he said.
Foreign investors continued their aggressive purchases on the local bourse yesterday, buying NT$21.32 billion in shares They have made more than NT$50 billion in purchases over the past three trading days, Taiwan Stock Exchange tallies showed.
The NT dollar has appreciated NT$1.514, or 4.9 percent, against the greenback since the beginning of this year.
Meanwhile, the greenback fell against major currencies in European trading yesterday morning, reaching a record low against the euro. The euro rose to US$1.5087 as sentiment increased that the US Federal Reserve would continue its rate cut campaign.
The euro hit a series of highs, culminating in US$1.5087 before falling back slightly to US$1.5031, nearly a full cent more than the US$1.4967 it bought in late trading in New York on Tuesday.
The dollar also fell against the yen, down to ?106.43, from ?107.26 and to 1.0693 Swiss francs, down from SF1.0759.
The British pound was quoted at US$1.9868, up from US$1.9862.
ROLLER-COASTER RIDE: More than five earthquakes ranging from magnitude 4.4 to 5.5 on the Richter scale shook eastern Taiwan in rapid succession yesterday afternoon Back-to-back weather fronts are forecast to hit Taiwan this week, resulting in rain across the nation in the coming days, the Central Weather Administration said yesterday, as it also warned residents in mountainous regions to be wary of landslides and rockfalls. As the first front approached, sporadic rainfall began in central and northern parts of Taiwan yesterday, the agency said, adding that rain is forecast to intensify in those regions today, while brief showers would also affect other parts of the nation. A second weather system is forecast to arrive on Thursday, bringing additional rain to the whole nation until Sunday, it
CONDITIONAL: The PRC imposes secret requirements that the funding it provides cannot be spent in states with diplomatic relations with Taiwan, Emma Reilly said China has been bribing UN officials to obtain “special benefits” and to block funding from countries that have diplomatic ties with Taiwan, a former UN employee told the British House of Commons on Tuesday. At a House of Commons Foreign Affairs Committee hearing into “international relations within the multilateral system,” former Office of the UN High Commissioner for Human Rights (OHCHR) employee Emma Reilly said in a written statement that “Beijing paid bribes to the two successive Presidents of the [UN] General Assembly” during the two-year negotiation of the Sustainable Development Goals. Another way China exercises influence within the UN Secretariat is
LANDSLIDES POSSIBLE: The agency advised the public to avoid visiting mountainous regions due to more expected aftershocks and rainfall from a series of weather fronts A series of earthquakes over the past few days were likely aftershocks of the April 3 earthquake in Hualien County, with further aftershocks to be expected for up to a year, the Central Weather Administration (CWA) said yesterday. Based on the nation’s experience after the quake on Sept. 21, 1999, more aftershocks are possible over the next six months to a year, the agency said. A total of 103 earthquakes of magnitude 4 on the local magnitude scale or higher hit Hualien County from 5:08pm on Monday to 10:27am yesterday, with 27 of them exceeding magnitude 5. They included two, of magnitude
Taiwan’s first drag queen to compete on the internationally acclaimed RuPaul’s Drag Race, Nymphia Wind (妮妃雅), was on Friday crowned the “Next Drag Superstar.” Dressed in a sparkling banana dress, Nymphia Wind swept onto the stage for the final, and stole the show. “Taiwan this is for you,” she said right after show host RuPaul announced her as the winner. “To those who feel like they don’t belong, just remember to live fearlessly and to live their truth,” she said on stage. One of the frontrunners for the past 15 episodes, the 28-year-old breezed through to the final after weeks of showcasing her unique