The New Taiwan dollar’s best year in three decades keeps getting better.
The NT dollar surged as much as 0.63 percent to NT$29.75 versus the US dollar in yesterday’s session, but pared some of its gain to 0.33 percent at the end. Even with this year’s climb topping 8 percent — the most since 1987 — central bank Deputy Governor Yang Chin-long (楊金龍) this week said the appreciation is not big compared with other exchange rates.
“Sentiment has been boosted on the local currency after the CBC [Central Bank of China] deputy governor said [on] Wednesday that the New Taiwan dollar’s gain this year is not too much,” Malayan Banking Bhd senior currency strategist Christopher Wong (黃經隆) said. “The deputy governor’s words eased concern of potential intervention to contain further New Taiwan dollar strength.”
The NT dollar yesterday advanced another NT$0.1 to close at NT$29.84 versus its US counterpart in Taipei trading, the strongest level since December 2013, according to the central bank’s tallies.
Turnover amounted to US$873 million at Taipei Forex Inc and US$372 million at the smaller Cosmos Forex Inc, compared with US$676 million and US$411 million respectively a day earlier.
The NT dollar has also been boosted by equity inflows, which saw the TAIEX close up 80.97 points, or 0.77 percent, to finish at 10,567.64 on relatively large turnover of NT$104.421 billion, up from the previous session’s NT$90.74 billion, Taiwan Stock Exchange (TWSE) data showed.
Foreign institutional players yesterday increased holdings in local shares by a net NT$6.5 billion, while domestic proprietary traders raised net stakes by NT$601 million and domestic investment trust companies by NT$435 million, TWSE statistics showed.
“With Taiwan companies becoming more and more important in the global electronics value chain, fund inflows lift the currency,” Cathay Securities Investment Trust Co (國泰投信) economist Aidan Wang (王誠宏) said.
“Currencies of Taiwan’s export-competing countries are also appreciating, so the local dollar’s strength won’t necessarily hurt Taiwan’s competitiveness,” he said.
Additional reporting by staff writer
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