By Sandra Chuang, The China Post
The NT dollar yesterday surged on heavy greenback selling pressure. The exchange rate against the U.S. dollar rose NT$0.428 to close at NT$34.072 on a daily turnover of US$691.5 million.
The exchange rate stood at NT$34.22 against the greenback when the market opened and extended its gains as greenback-selling sentiment among traders became stronger after Monday’s plummeting of the local currency.
“There were expectations that the central bank would not allow the local currency to fall much more after Monday’s sharp decline,” said a dealer. He added that most players were quiet yesterday, taking a wait-and-see attitude on the Central Bank of China (CBC) possible actions.
The exchange rate was quoted at NT$34.035 to one U.S. dollar at 12:00 p.m., up NT$0.465 from Monday’s closing of NT$34.5. In afternoon trading, the currencies steadied range-bound around NT$34.5 for rest of the session as the CBC began to buy back U.S. currency following sharp greenback losses of over US$2 billion Monday.
“The resilience of the NT dollar today suggested that the central bank backed its verbal intervention, as it believed yesterday’s laggard depreciation would help to increase Taiwan exporters’ competitiveness,” another dealer said. The NT dollar traded between NT$34.22 and NT$33.96 yesterday.