NT dollar rise causes capital inflow

The China Post staff

The anticipation of a stronger New Taiwan dollar in the following months has enticed an increasing influx of foreign capital, with official statistics issued by the Central Bank of China (CBC) indicated a net capital inflow of over US$1.4 billion, equivalent to NT$47 billion, over the past seven business days alone.

Market traders said that the NT dollar has been moving strongly since the beginning of this year, rising from the NT$35 to one U.S. dollar from early January to current NT$33.7. The CBC has observed the continued influx of foreign capital during the same period of time. Net capital inflow during the first six months hit a record high of US$45 billion.

Securities analysts say that foreign investors keep remitting money into Taiwan mainly due to optimism over the chances for the island’s economic recovering this year. They accelerated the pace, moving into the Taiwan market last week partly in reaction to the WorldCom’s accounting errors, a case anticipated to seriously erode investor confidence in the U.S. stock market.