The Taiwan dollar ended flat on Wednesday as active US dollar buying by the central bank and importers was offset by brisk foreign fund inflows. The Taiwan dollar finished at Tuesday's close of T$32.573 to the US dollar after opening stronger at T$32.548.
"Local banks were bidding for US dollars, while foreign institutions were busy offering. So it's basically a tug-of-war," said a dealer in Taipei. Another dealer said the central bank was also actively buying US dollars throughout the session to prevent the Taiwan dollar from firming past T$32.5.
Volume in the main Taipei Forex Inc exchange was US $1.345 billion, higher than US $1.249 billion a day earlier. The central bank has been trying to prop up the Taiwan dollar over the past few months, but it wants the strengthening to be gradual.
Before Wednesday, the Taiwan dollar had been rising for 9 straight sessions, gaining 1.6 percent in the process, partly due to a strong stock market performance triggering fund inflows. Dealers said oil firms had also been actively purchasing US dollars during the session. Foreign funds on Wednesday bought a huge net T$18.041 billion (US $553 million) in Taiwan stocks, which ended 0.8 percent higher, giving the Taiwan dollar some support.
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