The New Taiwan dollar fell this week as economic data that trailed estimates added to speculation the central bank would step up efforts to weaken the local currency.
Export orders dropped last month by the most in more than two years and industrial production fell for the first time in 16 months.
The NT dollar is the best performing currency in Asia this year, harming the competitiveness of local exporters. The central bank held its policy rate at 1.875 percent on Thursday, resisting joining a wave of global easing to spur growth.
The local currency fell 0.2 percent this week and 0.3 percent on Friday to NT$31.132 against its US counterpart. It has dropped by an average of 0.5 percent in the final hour of trading in the past five days amid suspected central bank intervention.
“Export orders deteriorated, and Taiwan’s dollar has appreciated versus the won and the yen,” Ta Chong Bank (大眾銀行) economist Woods Chen said. “The central bank will be watching the actions of other central banks.”
Diverging monetary policies in advanced nations have led to rapid moves in global funds, affecting the stability of Taiwan’s currency and financial markets, the monetary authority said in a statement on Thursday. Central bank Governor Perng Fai-nan (彭淮南) said that the NT dollar’s nominal effective exchange rate is still lower than that of the won’s. Taiwanese and South Korean exporters compete in international markets.
Across the region, Asian currencies completed a weekly loss, led by the Singapore dollar and the won, amid speculation emerging markets would see volatility in capital flows should Greece default.
The Bloomberg-JPMorgan Asia Dollar Index dropped 0.4 percent from June 19, the biggest decline in three weeks.
The won fell 0.8 percent in the past five days versus the US dollar, its biggest retreat in four weeks. The Singapore dollar lost 1 percent.
Malaysia’s ringgit weakened 0.7 percent in five days and 0.3 percent on Friday to 3.7680 per US dollar, according to data compiled by Bloomberg. The currency has dropped 2.7 percent this month amid speculation the nation is facing its first credit-rating downgrade since 1998.
Fitch Ratings will review Malaysia’s “A-” ranking before the end of the month, Andrew Colquhoun, head of Asia Pacific sovereign ratings, said on Tuesday. The country is “more than 50 percent likely” to be downgraded because of the worsening trade balance and concern about the ability of a state investment company to pay its debts, he said in March.
The yuan was little changed at 6.2090 per US dollar in Shanghai this week, China Foreign Exchange Trade System prices show.
Indonesia’s rupiah gained 0.2 percent this week. India’s rupee weakened 0.1 percent and Thailand’s baht fell 0.4 percent.
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