The New Taiwan dollar dropped more than 5 percent against the US dollar in the first half of this year, even as Taiwan sold a net US$9.06 billion to stabilize the exchange rate, the central bank said yesterday.
In a report submitted to the legislature, the central bank said that the factors acting on Taiwan’s foreign exchange market in the first half mainly originated in the US, including the continued resilience of the US economy, delayed and smaller-than-expected interest rate reductions by the US Federal Reserve, and increases in US bond yields and the US dollar index.
During the first six months of this year, Taiwan’s foreign exchange market experienced excess demand for US dollars, driving the NT dollar down 5.29 percent and prompting the central bank to intervene by selling a net US$9.06 billion to bolster the local currency, the report said.
Photo: CNA
By comparison, the central bank sold a net US$2.77 billion in the foreign exchange market over the whole of last year, during which the NT dollar fell by 0.09 percent.
Despite its depreciation, the NT dollar’s performance from Jan. 1 to Monday — a 4.45 percent drop against the US dollar — was better than that of the won and yen, which fell by 5.2 percent and 5.82 percent respectively, the central bank said.
The NT dollar rose against the US dollar yesterday, advancing NT$0.005 to close at NT$32.175 in Taipei trading.
Central bank Governor Yang Chin-long (楊金龍) is scheduled to brief the Legislative Yuan’s Finance Committee on the report today.
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