NT Dollar Hits Intraday Low of 32.985, Closes Down 5.5 Cents
As Taiwan stocks weakened, foreign investors continued to cut holdings and remit funds abroad. The NT dollar against the US dollar fell to an intraday low of 32.985 on the 5th, approaching the 33 mark, and closed at 32.876, down 5.5 cents. Central Bank Foreign Exchange Department Director General Tsai Chiung-min spoke out, urging exporters not to hold excessive expectations, to sell more when they have dollars, and to reassess the possibility of US rate hikes and the dollar trend. He also noted signs that foreign-investor selling is converging.
October Forex Reserves Fall to US$596.437 Billion
The central bank announced on the 5th that October foreign exchange reserves fell below US$600 billion, down US$4.308 billion from the prior month to US$596.437 billion, mainly due to the central bank stepping in to maintain order in the foreign exchange market. Tsai Chiung-min said foreign investors sold over NT$900 billion in Taiwan stocks in September, with a similar amount in October, and net outward remittances including dividends totaled about US$28 billion in October. As foreign investors continued to cut Taiwan stock holdings and remit funds abroad, Taiwan stocks fell below 42000 points, while the NT dollar continued to depreciate against the US dollar.
Tsai Chiung-min Urges Exporters Not to Over-Expect, Sell Foreign Exchange Early
With the NT dollar approaching 33, Tsai Chiung-min urged exporters not to hold excessive expectations, to sell more when they have dollars, and not to one-sidedly wait for better prices. He said Taiwan has strong fundamentals and a sound balance of payments, and whether past excessive expectations for better prices will pay off is something everyone should now seriously reassess. He also reminded firms with NT dollar demand to diversify when selling dollars, adding that foreign-investor selling appears to be gradually converging.
US Rate Hikes and Dollar Outlook Should Be Reassessed
On US rate hikes and the dollar outlook, Tsai Chiung-min said whether the US Federal Reserve will continue to raise rates remains to be seen, especially after the US midterm elections, with international oil prices falling and US inflation possibly easing. He noted some states may restrict AI investment, while US economic strength is tied to AI, so if AI investment slows, US economic growth may slow. US Treasury yields have also fallen considerably, to 4.8%. He said the dollar weakened slightly over the past two days and bond yields also declined, and if oil prices stay on a downward trend and US inflation pressures ease, everyone should reassess the likelihood of US rate hikes and the future dollar trend.