Taipei,Sept.13,2012(CENS)--The U.S.Federal Reserve Board will decide whether to roll out third round of quantitative easing policy(QE3)on Friday,prompting hot money to flow into Asia in advance,including Taiwan.As a result,the exchange rate of the New Taiwan dollar rose,for the fifth straight session,yesterday(Sept.12),closing at US$1=NT$29.669,the highest in three and a half months.
Inward remittance of foreign funds reached US$600 million yesterday and US$1.5-1.8 billion in the first three trading sessions this week.Banking managers remarked that should the U.S.Fed implement QE3,the U.S.dollar will weaken and the exchange rate of the NT dollar may climb over US$1=NT$29.5 in midsession on Friday.
Due to the onset of hot money,exchange rates of most currencies rose against the U.S.dollar yesterday.Euro climbed over US$1=1.29 euro and the exchange rate of Korean won against the U.S.dollar also hit one-month high.The NT dollar jumped NT$0.135 against the U.S.dollar in midsession but the scale of appreciation shrank to NT$0.046,closing at US$1=NT$29.699,eventually,on trading volume of US$1.252 billion.In line with the trend of Asian currencies,the NT dollar had advanced for five trading sessions in a row,with the accumulated scale of appreciation reaching NT$0.236.
In view of export decline,the Central Bank of China(CBC)goes along with the global trend to allow appreciation of the NT dollar but is determined to prevent its excessive appreciation,due to the concern over inflation.The movement trend of the Korean won is a key consideration of the CBCa??s policy.The Korean won also climbed for the fifth straight session yesterday,closing at US$1=1.126.4 won,up 0.16%,similar to the extent of appreciation of the NT dollar.
From the end of August,the NT dollar had appreciated 1%against the U.S.dollar as of yesterday,compared with the appreciation of 0.74%of the Korean won during the same period.
