Taipei, Jan. 16 (CNA) Taiwan’s central bank issued a rare statement on Tuesday in an effort to reassure investors, saying the recent depreciation in the value of the Taiwan dollar merely reflects global market trends, and emphasizing that on the whole the exchange rate remains “relatively stable.”
The U.S. dollar rose against the Taiwan dollar NT$0.177 (US$0.01) to close at NT$31.392, while the local stock market fell 199.95 points, or 1.14 percent, ending at 17,346.87 on Tuesday, three days after Taiwan held its presidential election.
The fall of the Taiwan dollar could be a result of the ruling Democratic Progressive Party winning the presidential election but losing its legislative majority, which has left investors with increased concerns, dealers said.
Investors could also be worried about future cross-strait relations particularly after the abrupt severing of ties between the Republic of China (Taiwan) and Nauru the previous day, dealers added.
However, the central bank pointed out that the Japanese, South Korean and Thai currencies have all depreciated more against the U.S. dollar this year than the Taiwan dollar.
The bank said that with the strong U.S. dollar, the Japanese yen has lost 3.5 percent of its value, while the South Korean won, Thai baht and Taiwan dollar have fallen 3.29 percent, 2.83 percent and 2.09 percent, respectively, since the beginning of the year.
The exchange rate fluctuations of the Taiwan dollar have been smaller than those of other major currencies so far this year, indicating a “relatively stable” Taiwan dollar, the bank said.
In the statement, the central bank reiterated its currency stabilization stance, underlining that it will continue to closely monitor foreign funds flowing in and out of Taiwan’s forex market.
