BLBG:Taiwan Dollar Leads Advance in Asian Currencies on IMF Funding
Taiwan’s dollar and Indonesia’s rupiah led gains in Asian currencies after the International Monetary Fund pledged more than $430 billion to safeguard the global economy, boosting demand for emerging-market assets.
The IMF doubled its war chest following meetings that ended yesterday in Washington, boosting the amount of funds that may be used to tackle Europe’s debt crisis. Gains were limited as reports this week may show South Korea’s economy expanded 2.9 percent in the first quarter, slowing from 3.3 percent growth, and Thailand’s exports rose 0.1 percent in March from a year earlier, down from 0.9 percent, according to median estimates of economists in Bloomberg surveys.
“The market is recovering its confidence after the agreement to support Europe’s financial stability,” said Akira Banno, a treasury adviser at Bank of Tokyo-Mitsubishi UFJ Bhd. in Kuala Lumpur. “There’s risk appetite.”
The Taiwan dollar added 0.1 percent to NT$29.488 against the greenback as of 10:02 a.m. local time, according to Taipei Forex Inc. The rupiah gained 0.04 percent to 9,180 per dollar and China’s yuan rose 0.03 percent to 6.3068, according to data compiled by Bloomberg.
Federal Reserve officials release their projections for U.S. economic growth and the appropriate path for the benchmark interest rate this week. Purchases of U.S. new homes probably rose 1.6 percent in March, according to the median estimate in a Bloomberg News survey before Commerce Department data due tomorrow, adding to signs of recovery in the world’s largest economy.
Exporter Demand
Taiwan’s dollar advanced to the strongest level in more than two weeks as speculation the central bank will favor appreciation to combat inflation encourages exporters to repatriate income.
Gains were limited after global funds sold $248 million more Taiwanese stocks than they bought last week, according to exchange data. The central bank may allow faster appreciation to control inflation, the Commercial Times reported on April 17, citing an unidentified official. Consumer prices rose 1.21 percent in March from a year earlier, after a 0.23 percent increase the previous month, government data show.
“With the lack of foreign investors coming into Taiwan, gains today are mainly driven by exporters selling the greenback,” said Tarsicio Tong, a currency trader at Union Bank of Taiwan (2838) in Taipei. “The currency has been hovering around NT$29.5 for months. It’ll be interesting to see if the central bank will tolerate more appreciation to fight inflation.”
Requesting Upgrade
South Korea’s won was little changed at 1,139.85 per dollar. Finance Minister Bahk Jae Wan visited Standard & Poor’s on April 20 and asked for an upgrade on the nation’s sovereign rating, Maeil Business Newspaper reported today.
“The IMF’s boost in lending power and South Korea asking for a rating upgrade are positive for the won, but effects will be limited as the IMF report was pretty much expected,” said Hong Seok Chan, a Seoul-based currency analyst at Daeshin Economy Research Institute. “With events including the Federal Reserve meeting coming up this week, the won will continue to trade within a range.”
Elsewhere, The Philippine peso was little changed at 42.61 per dollar and Malaysia’s ringgit was unchanged at 3.0642. Thailand’s baht declined 0.1 percent to 30.93.
To contact the reporters on this story: Yumi Teso in Bangkok at yteso1@bloomberg.net; Liau Y-Sing in Kuala Lumpur at yliau@bloomberg.net
To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net.
