Asia’s Hottest Currency Spurs Intervention Talk in Taiwan
A sudden 0.2% drop in the Taiwan dollar at the end of trading on Wednesday spurred speculation the central bank intervened.
(Bloomberg) -- Asia’s hottest currency may be getting too hot for Taiwan’s central bank.
A sudden 0.2% drop in the Taiwan dollar at the end of trading on Wednesday spurred speculation the central bank intervened, according to traders, who asked not to be named as they’re not authorized to talk to media. Late-session moves were a hallmark of suspected intervention in previous years.
The Taiwan dollar has surged 2.3% in the past three months, the best performance in Asia, fueled by foreign inflows in the stock market. Overseas investors have bought $4 billion of shares this month alone, set for the highest in three years.
The currency rose 0.4% to 30.42 per greenback Thursday, its highest level since July 2018. The Bloomberg Dollar Spot Index dropped 0.2% to a three-month low after the Federal Reserve cut borrowing costs. The central bank didn’t immediately reply to two phone calls.
Taiwan central bank Governor Yang Chin-long has previously said the monetary authority smooths the market when large inflows cause excessive volatility. The central bank rejects the term “intervention,” saying the value of the Taiwan dollar is determined by market forces.
To contact the reporters on this story: Cindy Wang in Taipei at hwang61@bloomberg.net;Chinmei Sung in Taipei at csung4@bloomberg.net
To contact the editors responsible for this story: Sofia Horta e Costa at shortaecosta@bloomberg.net, Samson Ellis, Philip Glamann
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