The New Taiwan dollar fell to its weakest level in more than eight years, as a selloff in semiconductor shares intensified outflows from local equities.
The currency dropped as much as 0.6 percent to 32.79 per dollar yesterday, the weakest since 2016. Global funds sold a net US$1.79 billion of Taiwanese equities on Thursday, exchange data showed, the most since April and the fifth straight day of outflows.
The NT dollar was impacted by broad strength in the greenback and outward remittances by foreign investors despite dollar sales by exporters, said traders, who asked not to be identified, because they are not authorized to speak publicly.
Photo: Chen Mei-ying, Taipei Times
Shares of Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, have declined over the past few sessions after US President Joe Biden’s administration floated tougher trade restrictions on China. TSMC’s stock price plunged 3.48 percent to close at NT$970, the lowest since July 3.
Former US president Donald Trump’s comments on Taiwan taking away the US’ chip business and his questioning of whether the US should defend Taiwan have added to investor concern.
“Rising tech stock volatility has triggered strong foreign equity outflows,” BNP Paribas SA greater China foreign exchange and rates strategy head Ju Wang (王菊) said.
“It is a typical risk off reaction. If the weak trend continues, we will see if authorities come out to smooth the trend,” he added.
NT dollar trading volumes jumped to the highest since 2022 yesterday. The currency is the biggest laggard among Asian currencies this month, down about 1 percent, and has slumped more than 6 percent this year.
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