Bloomberg News

Taiwan Dollar Reaches a Month Low on Greece Crisis; Bonds Steady

May 15, 2012

Taiwan’s dollar touched a one-month low as a political impasse in Greece fueled concern the nation will leave the euro. Government bonds were little changed.

Global funds sold $214 million more Taiwanese stocks than they bought today, a seventh day of net sales, according to exchange data. Greece, without a government for more than a week, must decide today whether to pay 436 million euros ($559 million) due to bondholders who shunned a debt swap last month.

“The situation in Europe continues to damp risk-taking appetite,” said James Wang, a fixed-income trader at Yuanta Securities Co. in Taipei. “Europe will continue to be the main thing moving sentiment.”

Taiwan’s dollar fell to NT$29.514 against its U.S. counterpart at the close, from NT$29.502 yesterday, according to Taipei Forex Inc. It earlier touched NT$29.579, the weakest level since April 16. One-month implied volatility, a measure of exchange-rate swings traders use to price options, rose 47 basis points to 5.2 percent.

The yield on the 1 percent notes due January 2017 was 0.967 percent, compared with 0.961 percent yesterday, according to Gretai Securities Market. It touched 0.95 percent earlier, the lowest level for benchmark five-year debt since March 1.

The overnight interbank lending rate was little changed at 0.509 percent, according to a weighted average compiled by the Taiwan Interbank Money Center. It closed at 0.514 percent on May 11, the highest level since 2008.

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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