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Local currency depreciates against US

TAIPEI--The Taiwan dollar lost 2.72 percent against the U.S. dollar over the year of 2013 to close at 29.950 Tuesday, the first time that the local unit has seen an annual depreciation against the greenback in more than four years.

Market analysts attributed the weakness of the local currency to the U.S. government's announcement that it will be gradually tapering down its quantitative easing program as the U.S. economy shows signs of recovery.

The exit of the measure, launched by the U.S. in 2009 to prop up its market, is widely expected to drive hot money back to the United States from emerging markets, pushing downing the values of regional currencies.

After the 2008 economic crunch, global capital rushed into U.S. dollar assets to push the greenback higher in value against other currencies, including the Taiwan dollar.

But global speculative money subsequently flew into emerging markets in the 2009-2012 period as a result of a weakening U.S. dollar, driving up emerging market currencies in Asia. During the four-year period, the Taiwan dollar appreciated against the U.S. dollar every year.

On Dec. 31, 2012, the Taiwan dollar closed at 29.136 against the greenback, compared with the finish of 29.950 on Tuesday, reflecting a depreciation of NT$0.814, or 2.72 percent, for the whole year.

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