Taiwan Dollar Rises to 13-Year High With a gain of .05 Percent

Taiwan dollar the best performing currency in Asia this quarter, finished with a gain of 0.5 percent after the withdrawal of a 13-year high on suspected central bank intervention.

The currency rose to 2.3 percent to NT $ 29,890 against the dollar, its highest level since October 1997, before paring its gain to close at NT $ 30.45. The currency has advanced 4.5 percent this quarter, global funds bought $ 1,500,000,000 shares in the country more than they sold this month, boosting the year's net purchases of U.S. $ 8 billion.

"Strong foreign capital inflows and strong economic growth are factors increasing the Taiwan dollar," said Henry Lin, a currency trader based in Taipei in Taiwan Shin Kong Commercial Bank. "The central bank will not allow a large increase in the currency. It's going to come for smooth movements."

The monetary authority has bought U.S. dollars in late trading almost every day since April to fight the satisfaction that poses a threat to exports, according to two traders familiar with the matter who declined to be identified.

China Trade

Relations with China have improved since Taiwan President Ma Ying-jeou, won the elections in March 2008, abandoning his predecessor's stance in favor of independence. The island has been self-ruled since the Nationalists of Chiang Kai-shek fled the mainland in 1949 after losing to Mao Zedong's communists in a civil war.

Under the terms of a trade pact signed in June, China agreed to open markets in 11 sectors such as banking services and lower tariffs on imports from Taiwan with a value of 13.8 billion U.S. dollars last year, or about 16 percent of the total.

growth in the third quarter of Taiwan's 9.8 percent was the fastest among the 10 largest economies in Asia. Taiwan Council for Economic Planning and Development of gross domestic product forecast to grow by 5 percent in 2011, the Economic Daily reported yesterday.

government bonds rose today on the island, dragging the benchmark yield to 10 years less than a maximum of nine months. The interest rate of 1 125 percent safety in September 2020 fell two basis points to 1.482 percent, according GreTai Securities Market, the largest island exchange of bonds. A basis point is 0.01 percentage point.