Bloomberg News

Taiwan Dollar Rises to One-Week High on European Debt Agreement

October 27, 2011

Oct. 27 (Bloomberg) -- Taiwan’s dollar rose to its strongest level in more than a week after European leaders agreed to expand a bailout fund to stem the region’s debt crisis. Government bonds were little changed.

Stocks indexes rallied across Asia after French President Nicolas Sarkozy said the euro region’s bailout fund will be leveraged by four to five times, and investors have agreed to a voluntary writedown of 50 percent on Greek debt. Taiwan is expected to report third-quarter economic growth of 3.6 percent, the slowest in two years, according to economists surveyed by Bloomberg before the data are released on Oct. 31.

“The agreement and long-awaited progress on Europe’s debt problem gave Asian currencies a boost,” said Tarsicio Tong, a Taipei-based trader at the Union Bank of Taiwan. “The Taiwan dollar has a strengthening trend, but Taiwan industries have been majorly hit by the global slowdown. That may change things.”

Taiwan’s dollar strengthened 0.2 percent to NT$30.063 against its U.S. counterpart, after weakening as much as 0.1 percent, according to Taipei Forex Inc. It reached NT$30.047, the strongest level since Oct. 18.

The yield on the 2 percent bonds due July 2016, the most- traded government debt, was little changed at 1.063 percent, prices from Gretai Securities Market show.

The overnight money-market rate, which measures interbank funding availability, was steady at 0.396 percent, according to a weighted average compiled by the Taiwan Interbank Money Center.

--Editors: Andrew Janes, James Regan

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

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


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