Bloomberg News

Taiwan Dollar Drops This Week on Slower Exports; Bonds Advance

December 09, 2011

Dec. 9 (Bloomberg) -- Taiwan’s dollar declined this week and government bonds gained after exports rose the least in more than two years amid a contraction in shipments to Europe.

Overseas sales increased 1.3 percent in November from a year earlier, compared with an 11.7 percent gain the previous month, the finance ministry reported yesterday. Goods sent to Europe slid 21.9 percent. Taiwan’s currency has lost 4.8 percent this half as the euro-area debt crisis dimmed the island’s export outlook.

“Export growth dropped very rapidly,” said Eric Hsing, a fixed-income trader at First Securities Inc. in Taipei. “Money will flow to the U.S. dollar.”

Taiwan’s dollar dropped 0.3 percent this week to NT$30.239 against its U.S. counterpart, according to Taipei Forex Inc. The currency fell 0.2 percent today. The benchmark Taiex index of stocks lost 3.5 percent this week.

Government bonds advanced this week as local investors sought safety in fixed-income securities, according to Hsing.

“The bond market will go bullish for a while,” he said.

The yield on the 2 percent bonds due July 2016 slipped one basis point, or 0.01 percentage point, today and this week to 0.985 percent, according to Gretai Securities Market.

--Editors: Sandy Hendry, Simon Harvey

To contact the reporter on this story: Lilian Karunungan in Singapore at lkarunungan@bloomberg.net

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


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