Sandra Chuang, The China Post
The NT dollar yesterday fell to its lowest level since Sept. 4, 1998, with the exchange rate down NT$0.111 to close at NT$34.656 to US$1 on a daily turnover of US$583 million. The NT dollar opened higher at NT$34.52 to US$1 but the gains were undermined by increasing greenback buying by foreign banks and importers amid mounting expectations that the local currency would see a further downward trend. “Given the desire to boost the export front, the central bank apparently opted to refrain from any strong intervention,” said a dealer.
“The purpose was likely to allow those who might be in need of the U.S. currency, particularly importers, to buy what they wanted, but this caused traders to intentionally test the bottom line,” he added.
At midday, the NT dollar was quoted at NT$34.72 to US$1, down NT$0.175 from the previous close amid a trading volume of US$247 million.
The NT dollar continued to drop in the afternoon session as market sentiment was further depressed after the Ministry of Finance (MOF) released negative import and export statistics for June. Figures released by the MOF showed that compared with the same period last year, export and import for the second quarter recorded a historical drop since 1976, falling 17 percent and 22.8 percent, respectively. Though greenback selling by the Central Bank of China was not seen as overly determined to defend the NT dollar, the final profit taking by banks nonetheless prevented the local currency from further depreciating toward the close.
The NT dollar was traded between NT$34.52 and NT$34.759 yesterday.