The New Taiwan fell sharply against the US dollar yesterday to close at its lowest level since May 22 amid a massive outflow of funds from the country because of investors panicking over global equity markets.
The NT dollar ended at NT$31.580 against the US dollar, slightly lower than a previous record of NT$31.568 seen on May 22, after moving between NT$31.500 and NT$31.648 on combined turnover of US$3.062 billion on the Taipei Foreign Exchange and the Cosmos Foreign Exchange.
The NT dollar got a significant hit in the morning session, slumping as much as NT$0.173 at a time when other Asian currencies also faced downward pressure, dealers said.
Photo: CNA.
But the plunge led many Taiwanese exporters to dump their US dollars in exchange for more local currencies, which helped the NT dollar recoup part of its losses, dealers added.
In addition, Taiwan’s central bank also stepped in by selling the US dollar and buying the NT dollar to cap the greenback’s gains by the end of the session, dealers said.
But movements on Taiwan’s stock market drove up demand for the US dollar.
Foreign institutional investors sold a net NT$93.85 billion in shares yesterday as the TAIEX plunged 2,694 points at one point before rebounding to close down 1,568.16 points, or 3.48 percent, at 43,502.78.
The selling came as foreign institutional investors scrambled to move their funds out of Taiwan during the session to meet redemption needs back in the US after Friday’s heavy losses, dealers said.
That pushed demand for the US dollar higher, helping drive its value against the NT dollar up, they said.
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