Outflows of funds pushes down NT dollar

By Sandra Chuang, The China Post

The NT dollar yesterday fell to a 31-month low due to outflows of foreign funds. The exchange rate fell NT$0.021 to close at NT$33.458 against the U.S. dollar, while the daily turnover expanded to US$501 million.

The exchange rate stood at NT$33.419 to one U.S. dollar when the market opened, and continue to climb to NT$33.375 in line with the appreciating Japanese yen. The yen was quoted at 119 against the greenback in Tokyo early yesterday, up from the Wednesday’s closing level of 120.39.

The Central Bank of China is expected to take actions to cap the local currency at the NT$33.5 level.

However, in the afternoon, the local currency dipped on reports that the yen had been pulled down on intervention by Japan’s central bank. The NT dollar continued to drift lower during the later trading hours mainly due to the outflow of foreign funds and active greenback buying by importers.

“The deprecation of the NT dollar today suggested that the currency is still trading under the depreciation pressure of dropping below the NT$33.5 resistance level,” said a dealer. The NT dollar traded between NT$33.47 and NT$33.375 yesterday.