The local currency fared relatively well compared with counterparts in the region that are taking a hit from renewed capital outflows, the central bank said yesterday.
The New Taiwan dollar yesterday shed NT$0.177 to NT$31.392 against the US currency in Taipei trading, with turnover of US$2.347 billion, it said in a statement.
The local currency has weakened 2.09 percent so far this year, milder than the yen’s 3.5 percent fall, the won’s 3.29 percent retreat and the baht’s 2.83 percent drop, it said.
Photo: CNA
The central bank attributed the currency movements mainly to the US dollar’s latest gains after Federal Reserve Bank of New York President John Williams last week said it is still too soon to call for rate cuts, as the US Federal Reserve still has some ways to go to get inflation back to its 2 percent target.
The remarks dampened expectations that the Fed would start to lower interest rates in March after last month indicating that monetary tightening is drawing to an end.
Higher-than-expected consumer prices and healthy employment data in the US lent support to Williams’ views, Taiwan’s central bank said.
Consequently, emerging market currencies, which benefitted from liquidity-driven rallies last month, are seeing renewed capital outflows, it said.
The TAIEX yesterday closed down 1.14 percent, or 199.95 points, to 17,346.87 after foreign institutional players cut holdings by a net of NT$45.11 billion for the second straight session after Saturday’s presidential and legislative elections.
The central bank said it would closely monitor capital movements and painted inflows and outflows as common global fund deployment practices.
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