The Taiwan dollar plummeted to a more than four-year low on Friday, the last trading day before the week-long Lunar New Year, on dismal economic data and central bank intervention, dealers said. The Taiwan dollar closed at T$33.801 against the US dollar, weaker than Thursday's finish of T$33.550, and the lowest price since October 22, 2004.
"The dollar dropped because the fundamentals aren't good," a currency dealer in Taipei said. "Economic data, such as industrial production and the jobless rate, are all pointing to a weak dollar, and then the central bank intervened." Taiwan suffered its worst-ever fall in export orders for a second month in a row in December and looked set to suffer more in January as a weak global economy sapped demand for everything from mobile phones to plastics, data showed.
The island's central bank is suspected of selling the currency near the end of the session to help exporters by making their products cheaper in overseas markets. In earlier trade on Friday, exporter deals helped prevent the Taiwan dollar from weakening too much, dealers said. Exporters prefer a weaker Taiwan dollar so they can convert their USD earnings into more of the local currency.