The New Taiwan dollar yesterday advanced another 0.9 percent to hit a seven-month high of NT$29.7 versus the US dollar in Taipei trading, rising above the NT$30 mark for a second straight day on the back of hot money inflows, dealers said.
This week alone, the local currency picked up 2.2 percent after global capital regained interest in emerging markets, including Taiwan, on expectations that the US Federal Reserve would slow its pace of tightening, making investment in vehicles other than the greenback more attractive, dealers said.
The speculation won support from the Fed’s latest interest rate hike of 0.25 percentage points, moderating from its previous increases of 0.5 to 0.75 percentage points. Fed Chair Jerome Powell on Wednesday said that inflation is slowing and the US would avoid a recession this year.
Photo: Chen Mei-ying, Taipei Times
Global bourses welcomed the Fed’s dovish-leaning stance, with the TAIEX yesterday rallying 1.14 percent, or 175.03 points, to 15,595.16, Taiwan Stock Exchange (TWSE) data showed.
Foreign institutional investors yesterday increased holdings in local shares by a net NT$22.54 billion (US$758.9 million), after raising their stakes for the past 13 consecutive sessions, TWSE statistics showed.
If the trend continues, it would lend further strength to the local currency, dealers said.
Foreign exchange turnover yesterday amounted to US$1.66 billion at Taipei Forex Inc, the central bank said.
In other developments, the Cabinet yesterday appointed former vice premier Shen Jong-chin (沈榮津) as chairman of state-owned Taiwan Financial Holdings Co (台灣金控). Shen had also served as minister of economic affairs prior to his stint as vice premier from 2020 to last month.
Incumbent Taiwan Financial Holdings chairman Joseph Lyu (呂桔誠) is to stay on as the chairman of the group’s flagship subsidiary Bank of Taiwan (臺灣銀行).
Shen’s appointment takes effect today.
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