Taiwan Dollar Gains as Exporters Repatriate Funds; Bonds Steady

Taiwan’s dollar gained the most in almost two weeks on speculation exporters are converting overseas earnings as the month-end approaches. Government bonds were little changed.

The local currency has rallied 1.9 percent in September, the second-best performance in Asia, as global funds bought $1.6 billion more Taiwanese stocks than they sold, according to exchange data. Central bank Governor Perng Fai-nan said yesterday that demand for the island’s goods from overseas is showing signs of improvement and the monetary authority’s mandate is to maintain relative stability in the exchange rate and step into the market in the event of abnormal fluctuations.

“It’s mainly exporters selling the U.S. dollar today,” said Tarsicio Tong, a foreign-exchange trader at Union Bank of Taiwan in Taipei. “Exports might be getting better like the governor said, but we’re still lacking enough evidence out there to show fundamentals have improved.”

The Taiwan dollar rose 0.3 percent to NT$29.42 against its U.S. counterpart, the biggest advance since Sept. 14, according to Taipei Forex Inc. It reached NT$29.198 on Sept. 17, the strongest level since May 3, and has appreciated 1.6 percent this quarter.

One-month non-deliverable forwards in the currency advanced 0.2 percent to NT$29.375, according to data compiled by Bloomberg. Implied volatility, a measure of exchange-rate swings used to price options, increased three basis points to 3.78 percent.

Industrial production rose 1.89 percent last month from a year earlier, the most since February, official data showed Sept. 24. Export orders declined in August for a sixth month, a report showed last week.

The yield on Taiwan’s 1.125 percent bonds due September 2022 was at 1.168 percent, according to Gretai Securities Market. The overnight money-market rate climbed one basis point to 0.399 percent, a weighted average compiled by the Taiwan Interbank Money Center shows.

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