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U.S. dollar closes higher on Taipei forex (update)

U.S. dollar closes higher on Taipei forex (update)

Taipei, Feb. 5 (CNA) The U.S. dollar rose against the Taiwan dollar Thursday, gaining NT$0.062 to close at NT$31.535 as the local central bank seized weakness in other regional currencies to drag down the local unit into the red at the close, dealers said. The central bank's intervention offset the impact on the U.S. dollar resulting from selling in other currencies in the region after the People's Bank of China (PBOC) cut interest rates a day earlier, the dealers said. The buying by the central bank also helped the U.S. dollar regain its footing after the currency's fall caused by further foreign institutional purchases of local shares, they added. The greenback opened at NT$31.520 and moved between NT$31.350 and NT$31.538 before the close. Turnover totaled US$881 million during the trading session. The U.S. dollar opened higher on a mild technical rebound but soon fell into negative territory on the back of continued fund inflows into the local market, which boosted demand for the Taiwan dollar, the dealers said. In the local bourse, foreign institutional investors bought a net NT$2.09 billion (US$66.28 million)-worth of local shares on the main board, placing further downward pressure on the U.S. dollar, they said. In the afternoon session, the central bank stepped in to prop up the U.S. dollar after it fell below the NT$31.40 mark, a move that showed the central bank's determination to keep the Taiwan dollar cheaper in a bid to protect Taiwanese exporters, the dealers said. The losses suffered by other regional currencies gave the local central bank a strong hint that it should intervene after the PBOC cut its reserve requirement ratio for the first time in more than two years to tackle an economic slowdown, they said. China's move to ease its monetary policy triggered speculation that currency depreciation competition in the region has been escalating, which prompted traders to cut their holdings in major regional currencies such as the South Korean won and the Japanese yen, the dealers said. Under such circumstances, the local central bank had no choice but to jump onto the trading floor to stem the U.S. dollar's losses, they said. (By Frances Huang)


Updated : 2021-09-19 09:56 GMT+08:00