Taiwan Dollar at 1-Week High on Exporters’ Demand; Bonds Steady

Taiwan’s dollar rose to the strongest level in a week on speculation exporters are taking advantage of a relatively favorable exchange rate to repatriate income. Government bonds were little changed.

Global investors bought $284 million more Taiwanese shares than they sold in the past three days, ending an eight-day run of net sales, exchange data show. The local dollar lost 1.4 percent this month after $1.7 billion was pulled from the stock market as the lingering European debt crisis damped demand for riskier emerging-market assets.

“Foreign funds have poured quite a big amount of money into the market lately, and exporters are selling the greenback as well,” said Tarsicio Tong, a trader at Union Bank of Taiwan in Taipei. “Trading volumes are getting significantly less as we approach the end of the year.”

The Taiwan dollar rose 0.2 percent to NT$30.345 against its U.S. counterpart, according to Taipei Forex Inc. It hit the high of NT$30.266 earlier.

The yield on the 2 percent bonds due July 2016 was little changed at 1.036 percent from 1.040 percent yesterday, prices from Gretai Securities Market show. The rate has dropped three basis points, or 0.03 percentage point, in November. The central bank is scheduled to review borrowing costs before year-end, with a date yet to be announced.

The overnight money-market rate, which measures interbank funding availability, was at 0.397 percent compared with 0.396 percent yesterday, according to a weighted average compiled by the Taiwan Interbank Money Center.

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