Taiwan dollar advances on investment inflows

Foreigners bought US$298 million more Taiwan equities than they sold today, boosting this month's net purchases to US$1.4 billion. Taiwan's central bank may follow China and order domestic lenders to set aside more deposits as reserves to curb loan growth and cool surging property and stock prices, according to Citigroup Inc. and Standard Chartered Plc.

“The Taiwan dollar is still under pressure to appreciate over the short term,” said Yang Kung-yi, a currency trader at Shanghai Commercial & Savings Bank in Taipei. “It's taking its cue from stocks.”

The local dollar appreciated 0.1 percent to NT$31.850 against its U.S. counterpart as of the 4 p.m. close local time, according to Taipei Forex Inc. It earlier touched NT$31.824, the strongest level since Feb. 6, and has gained 9.4 percent since the last bear market in U.S. stocks ended a year ago yesterday. The central bank issued NT$1.98 trillion of certificates of deposit in the first eight days of the month, more than the NT$1.9 trillion that matured, according to its Web site. The average overnight interbank rate, a benchmark for the money market, climbed to 0.123 percent today, the highest level in 10 months, according to the Taipei Interbank Money Center.

Taiwan's five-year government bonds were little changed, with yields near the highest level in almost two months, after the monetary authority absorbed liquidity from the banking system.

The yield on the 0.875 percent note maturing January 2015 was at 0.955 percent, according to Gretai Securities Market, Taiwan's biggest exchange for bonds. It reached 0.97 percent Monday, the highest since Jan. 11. The price fell 0.021, or NT$21 per NT$100,000 face amount, to 99.6227. A basis point is 0.01 percentage point.

Subscribe to The China Post and save 25%. Click here

PrintEmail

Write a Comment

Terms

Enter your comments - 3000 characters max

Type in image code

Submit

 Receive China Post promos
 Respond to this email