The Taiwan dollar reversed earlier losses to end higher on Friday as the central bank stepped into the market to sell US dollars, joining exporters and foreign funds. The Taiwan dollar, which rose strongly in the final minutes of trade, ended at T$32.735 to the US dollar, the strongest close since January 9.
The local currency opened stronger at T$32.785, firmer than the previous close of T$32.836. Volume also surged on the main Taipei Forex Inc exchange in late trade, totalling a hefty US $1.0465 billion, much higher than US $810 million a day earlier.
"It's the central bank of course," said a dealer in Taipei, referring to the huge swing into positive territory and active volumes just before the market close. Dealers said exporters were also actively converting their US-dollar earnings to the local currency to meet their cash needs at the end of the month.
Foreign fund inflows were also significant, especially given foreign institutions' recent purchases in the stock market. Foreign institutions, which had been active net purchasers in the equity market in June, bought another T$931 million (US $28 million) on Friday. The Taiwan dollar had weakened for most of the session before reversing its trend. "Oil firms, insurers and investment firms were buying US dollars," said another dealer in Taipei.
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