The New Taiwan dollar dropped to its lowest point in nearly six years against the greenback yesterday ahead of the release of what is expected to be more dismal economic data next week amid the deepening global slump, analysts said.
The central bank, seeking to lower borrowing costs, cut annual interest rates on passbook and time deposits to 0.173 percent and 0.771 percent respectively, effective yesterday. The rates were previously at 0.2 percent and 0.921 percent.
The local currency dropped NT$0.1.33, or 0.38 percent, to close at NT$34.808 against its US counterpart, the lowest level since May 2003, Taipei Forex Inc data showed. Altogether, the NT dollar shed 2.2 percent this week and is expected to tumble below the NT$35 level next week when the government is to unveil the latest export order and unemployment figures, dealers said.
“I bet the NT dollar will depreciate below the NT$35 threshold in two or three more trading days, given its performance these days,” a trader at a local bank said on condition of anonymity.
The currency has weakened for 12 days in a row.
The same dealer said he would not be surprised if the NT dollar fell to NT$36 against the greenback, as several foreign banks forecast, to reflect the economic woes.
Turnover amounted to US$680 million on the Taipei Forex, while transactions on the smaller Cosmos Foreign Exchange stood at US$342 million, for a total of US$1.02 billion, figures from the two foreign exchanges showed.
A dealer at Union Bank of Taiwan (聯邦銀行) agreed that the grim economy was to blame for the increasingly cheap NT dollar but added that the South Korean won helped drag the currency down.
“There is no reason for the NT dollar to strengthen given the economic plight the nation is in,” the dealer said by telephone. “The central bank apparently has no choice but to join the depreciation race [instigated by South Korea] to placate exporters.”
The South Korean currency devalued 6.9 percent this week.
The dealer predicted the NT dollar would continue to weaken at a slow, steady rate in the near future.
The local currency opened at NT$34.675 and touched NT$34.85 during the trading session.
Kevin Hsiao (蕭正義), head of UBS Wealth Management Research in Taiwan, voiced skepticism that a weak NT dollar could help ease declines in foreign sales, saying the root cause lay in slumping global demand.
“The [South Korean] won depreciated 35 percent last year but the nation’s exports contracted 32.8 percent in January,” Hsiao said by telephone. “The figures show a weak currency is no remedy for the flagging economy.”
VALUABLE STOCK: The company closed at NT$1,005 a share, on demand for AI and HPC chips, and is expected to issue a positive report during its earnings conference Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) shares rose 2.66 percent to close at a record high of NT$1,005 yesterday. as investors expect the company to continue benefiting from strong demand for artificial intelligence (AI) and high-performance computing (HPC) chips. TSMC is the 19th member of the local bourse’s NT$1,000 stock club, which includes smartphone chip designer MediaTek Inc (聯發科) and electric transformer manufacturer Fortune Electric Co (華城電機). Yesterday’s rally swelled TSMC’s market capitalization to NT$26.06 trillion (US$802.3 billion) and contributed about 211 points to the TAIEX, which closed up 350.1 points, or 1.51 percent, to 23,522.53, another record high, Taiwan Stock
The waves of the Aegean Sea lap gently at the tables and chairs of two beach restaurants on Greece’s Halkidiki peninsula. It is an idyllic scene, but one that is totally illegal. Like many others in Greece, the two establishments on Pefkochori Beach do not have a license to set up shop so close to the water. After a wave of protests last summer by locals about bars and restaurants illegally covering beaches with sunbeds and tables, the Greek state is taking action. It is cracking down on rogue tourist practices with surveillance drones, satellite imagery and a special app
South Korea’s SK Hynix Inc, the world’s No. 2 memorychip maker, is to invest 103 trillion won (US$74.6 billion) through 2028 to strengthen its chips business, focusing on artificial intelligence (AI), its parent SK Group said yesterday. SK Group also said it plans to secure 80 trillion won by 2026 to invest in AI and semiconductors as well as fund shareholder returns, while streamlining its more than 175 subsidiaries. The sprawling conglomerate outlined the plans following a two-day strategy meeting, aiming to revive the group after SK Hynix, its main money maker, and the group’s electric vehicle battery arm suffered heavy losses. SK
Luxgen Motor Co (納智捷汽車), a subsidiary of Yulon Motor Co (裕隆汽車), yesterday said it is again offering a NT$100,000 discount for its entry-level n7 electric vehicle models. The n7’s price has gone down from NT$1.099 million to NT$999,000, Luxgen said, adding that there are 25,000 preorders for the model. MG Motor’s electric hatchback, the MG4, entered the market in the middle of last month, with a starting price of NT$990,000. China Motor Corp (中華汽車), which distributes MG vehicles in Taiwan, said it aims to sell 1,600 MG4s this year. MG, originally a British brand, was acquired by China’s SAIC Motor