Bloomberg News

Taiwan Dollar Declines as Europe, Costlier Oil Deter Risk-Taking

February 22, 2012

Feb. 22 (Bloomberg) -- Taiwan’s dollar weakened for a second day as oil prices at a nine-month high and concern Greece’s bailout won’t resolve Europe’s debt crisis deterred risk-taking. Government bonds were little changed.

Crude oil for April delivery advanced almost 8 percent this month and touched $106.41 a barrel today, the highest since May 5, according to data compiled by Bloomberg. A second rescue package for Greece may not be enough to end the debt crisis, Bank of England Deputy Governor Charlie Bean said yesterday. Foreign funds sold $39 million more Taiwanese stocks than they bought yesterday, exchange data show.

“Investors prefer safety over risk given the recent spike in oil prices and the Greek debt talks,” said Eric Hsing, a fixed-income trader at First Securities Inc. in Taipei.

The Taiwan dollar declined 0.05 percent to NT$29.582 against its U.S. counterpart in Taipei, according to Taipei Forex Inc.

The yield on the government’s 1.25 percent bonds due March 2022 was at 1.280 percent, compared with 1.282 percent yesterday, prices from Gretai Securities Market show. Benchmark 10-year rates reached 1.260 percent on Feb. 16, the lowest closing level since Dec. 19.

The island has no plan to increase borrowings above current budget estimates, Finance Minister Christina Liu said yesterday at a briefing in Taipei. Taiwan hopes to attract more private investment in public infrastructure such as build-operate- transfer projects, Liu said.

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

--Editors: Andrew Janes, Anil Varma

To contact the reporter on this story: Fion Li in Hong Kong at fli59@bloomberg.net

To contact the editor responsible for this story: James Regan at jregan19@bloomberg.net


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