Bloomberg News

Taiwan Dollar Falls to 3-Week Low on Export Slump; Bonds Steady

November 16, 2011

Nov. 16 (Bloomberg) -- Taiwan’s dollar fell to a three-week low on concern a lingering debt crisis in Europe will hurt the island’s exports. Government bonds were little changed.

Asian currencies retreated today after Italy’s 10-year bond yield exceeded the 7 percent level that prompted Greece, Ireland and Portugal to seek bailouts. Economists expect Taiwan data next week to show export orders gained 3.8 percent in October from a year earlier following a 2.7 percent increase in September that was the smallest in two years, according to a Bloomberg survey.

“Looks like there’s a big chance the debt crisis will spread to countries like Italy and Belgium,” said Henry Lin, a Taipei-based foreign-exchange trader at Taiwan Shin Kong Commercial Bank. “Taiwan’s dollar will continue its depreciating trend due to the weaker global growth prospects.”

Taiwan’s dollar slipped 0.07 percent to NT$30.23 against its U.S. counterpart, according to Taipei Forex Inc. It touched NT$30.28 earlier, the weakest since Oct. 24. Lin forecasts the currency will retreat to NT$30.50 by year-end.

The yield on Taiwan’s 1.25 percent bonds due September 2021, the most-traded government securities, was steady at 1.33 percent, prices from Gretai Securities Market show.

The overnight money-market rate, which measures interbank funding availability, was little changed at 0.398 percent, according to a weighted average compiled by the Taiwan Interbank Money Center.

--Editors: James Regan, Andrew Janes

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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