Taiwan dollar forwards rose, approaching a 14-month high, on speculation exports will pick up as China’s economy improves. Government bonds were steady.
Exports from China, the world’s second-largest economy, increased 11.6 percent in October from a year earlier, the most since May, data showed Nov. 10. Taiwan’s central bank denied imposing new foreign exchange rules, it said a statement today. The monetary authority this week started requiring lenders to prove demand stems from trade and investment purposes before the island’s currency can be bought using U.S. dollars, according to two traders who asked not to be identified in keeping with their companies’ policies.
“The appreciation is reflecting investors are optimistic about the outlook for recovery in the region,” said Ma Tieying, an economist at DBS Group Holdings Ltd. in Singapore. “Taiwan’s central bank is still more cautious on the currency’s gains.”
One-month non-deliverable forwards for the Taiwan dollar gained 0.1 percent to NT$28.89 versus the greenback as of 4:30 p.m. in Taipei, according to data compiled by Bloomberg. The contracts touched NT$28.823 on Nov. 12, the strongest level since Aug. 24, 2011. The forwards were at a 0.8 percent premium to the spot rate, which closed little changed at NT$29.125, based on Taipei Forex Inc. prices.
The yield on the government’s 1.125 percent bonds due September 2022 was steady at 1.118 percent, according to Gretai Securities Market. The overnight interbank lending rate was also little changed at 0.386 percent, a weighted average compiled by the Taiwan Interbank Money Center shows.
-- Editors: Andrew Janes, Amit Prakash