The Taiwan dollar ended barely weaker on Tuesday as oil firms sought US dollars, although volumes were thin as investors were sidelined for Christmas and several regional markets were closed. The Taiwan dollar ended marginally softer at T$32.499 to the US dollar compared with the previous close of T$32.498.
Some dealers noted US dollar selling by government-affiliated banks just before the end of trade, which may have been on behalf of the central bank, helping to limit the local currency's losses. Dealers said the central bank has been aiming in the past week to keep the Taiwan dollar at T$32.5 to the US dollar or above.
Volume on the main Taipei Forex Inc exchange was thin at US $408 million, lower than US $724 million a day earlier. "There were routine deals from oil companies in the morning, but there were none in the afternoon," said a dealer in Taipei. "There were (recent) US dollar purchases for arms buying, but we didn't see that today."
"There is not much else happening since it's Christmas." Many regional markets, including South Korea, Singapore and Hong Kong, are closed on Tuesday for the Christmas holiday. The central bank, keen for a gradual firming of the Taiwan dollar to curb inflation and capital outflows, has been selling US dollars over the past few months to help prop up the local currency.
However, a lacklustre stock market performance in December has been causing the Taiwan dollar to weaken recently and the local currency has only gained 0.3 percent since the beginning of this year.