Taiwan dollar rises to 13-year high on China trade

Taiwan’s dollar advanced to NT$28.476 against the US dollar yesterday, the highest rate since 1997, based on optimism that rising consumer spending on the mainland will spill over into the island’s economy, Bloomberg reported. Global funds made net purchases of US$602 million worth of Taiwan-listed company stocks in the last two days following announcements by China at the Sino-US Strategic and Economic Dialogue that it will boost consumer spending and imports. A currency trader was quoted as saying that surpassing the NT$28.50 rate was “a big psychological level.” The currency subsequently pared its gains based on suspected intervention by Taiwan’s central bank. Government bonds were up slightly.