The New Taiwan dollar had a modest rebound against its US counterpart yesterday on the central bank’s intervention and amid concerns from lawmakers over the currency’s sharp depreciation.
The NT dollar gained 0.02 percent, or NT$0.079, to close at NT$35.095 against the greenback, Taipei Forex Inc data showed. The NT closed in the vicinity of the NT$35.30 mark, a level known to market players as an important psychological line for Central Bank Governor Perng Fai-nan (彭淮南), dealers said.
On Monday, the NT dollar weakened against the US dollar and sank below the NT$35 level to end at 35.174.
Perng told the legislature yesterday that the NT dollar remained relatively stable.
“Although the NT dollar has been fluctuating, it remains relatively stable compared with the South Korean won, the Japanese yen, the euro and the Singapore dollar,” he told Chinese Nationalist Party (KMT) Legislator Chang Ching-chung (張慶忠).
While restating that the value of the NT dollar was up to the market to decide, Perng said the bank would take action to curb excessive fluctuations.
Chang called on the government to ensure that the currency did not fall too low, even if at the moment it helped exports. Importers, he said, had complained about rising costs following the recent decline.
The NT dollar opened at NT$35.174 and dropped to NT$35.297, prompting the central bank to intervene and push it up to NT$35.04 at midday, a trader at a foreign bank in Taipei said.
Turnover was US$957 million on the Taipei Forex and US$271 million on the smaller Cosmos Foreign Exchange for a total trade volume of US$1.228 billion, data from the two companies showed.
“The regulator’s intervention accounted for the respite in the NT dollar’s decline,” the dealer said by telephone. “The adjustment may last a few days and the decline will continue.”
The dealer said the central bank, while favoring a weaker NT dollar to help boost exports, frowned on a quick or drastic drop.
Domestic and foreign currency analysts have predicted that the local currency will depreciate to the NT$36 level in the first half to reflect the nation’s poor economic fundamentals.
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