Bloomberg News

Taiwan Dollar Rises to 3-Week High, Bonds Drop on European Plan

October 17, 2011

Oct. 17 (Bloomberg) -- Taiwan’s dollar advanced to the strongest level in more than three weeks and government bonds declined on speculation Europe’s leaders are moving closer to containing the region’s debt crisis.

The currency gained for a third day after finance ministers and central banks from the Group of 20 nations endorsed parts of a plan to avoid a Greek default. Taiwan’s government sold NT$40 billion ($1.3 billion) of five-year bonds today at 1.08 percent today, higher than the 1.05 percent median estimate of five finance companies in a Bloomberg survey.

“News out of Europe is bolstering risk sentiment and hurting bonds,” said Eric Hsing, a fixed-income trader at First Securities Inc. in Taipei. “In the short run, yields will go up.”

Taiwan’s dollar closed 0.7 percent stronger at NT$30.100 against its U.S. counterpart, according to Taipei Forex Inc. It touched NT$30.018 earlier, the strongest level since Sept. 21.

The yield on the government’s 2 percent bonds due July 2016, the most-traded security, rose three basis points to 1.072, prices from Gretai Securities Market show.

The overnight money-market rate, which measures interbank funding availability, was little changed at 0.395 percent, according to a weighted average compiled by the Taiwan Interbank Money Center.

--Editors: Ven Ram, Anil Varma

To contact the reporter on this story: Andrea Wong in Hong Kong at awong268@bloomberg.net

To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net


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