US dollar closes higher on Taipei forex at NT$29.690
CNATAIPEI, Taiwan -- The U.S. dollar rose against the Taiwan dollar Wednesday, gaining NT$0.058 to close at the day's high of NT$29.690 after consolidating throughout the trading session, dealers said.
September 26, 2013, 12:05 am TWN
In wake of a weakening South Korean won, Taiwan's central bank stepped in to buy into the U.S. dollar and help the local currency reverse earlier losses amid fears that Taiwan would lose export competitiveness due to a strong currency, they said.
The greenback opened at NT$29.660, and moved to a low of NT$29.550 before rebounding. Turnover totaled US$894 million during the trading session.
The U.S. dollar sustained its momentum from a session earlier to open higher on the back of buying from foreign banks operating in Taiwan, but downward pressure followed as foreign institutional investors kept picking up stocks on the local market, dealers said.
Foreign institutional investors were net buyers of NT$3.95 billion (US$133 million) in shares on Taiwan's stock exchange on Wednesday, the 20th consecutive session in which they value of the shares they bought exceeded the value of the shares they sold.
Since the beginning of the streak on Aug. 28, they have bought a net NT$126.22 billion in shares, which has contributed to the Taiwan dollar's appreciation against the greenback from NT$30.06 to as high as NT$29.55 on Wednesday.
The central bank intervened again late in the session, dumping the Taiwan dollar in exchange for the U.S. dollar, to prevent the local currency from appreciating too quickly and hurting the country's exports, dealers said.
The central bank's presence become more obvious as the won suffered its steepest decline in more than a month amid concerns that the Bank of Korea would forcefully intervene to keep the won's value low against the U.S. dollar.
Fears over the BOK's intervention escalated after the bank said it would respond “flexibly” to the won's instability if necessary.
Taiwan and South Korea are competitors in the global market, and many Taiwanese business leaders have urged the country's central bank to intervene and keep the value of the Taiwan dollar low to help them remain competitive against their Korean rivals.
The local central bank has intensified its efforts to depress the local currency since the Taiwan dollar rose to its highest level in more than four months on Monday on continued fund inflows, dealers said.