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MACROECONOMICS
NT SURGES, BANK REACTS
Soaring in value and breaking several records, but running out of steam
a little at the end of the month, the NT dollar was the biggest story
in the local economy during March.
In the early part of the month, the NT gained value against its U.S.
counterpart due to foreign fund inflows – an influx encouraged by an
interest-rate differential between Taiwan and the United States – as
well as expectations that cross-Strait ties might improve if Ma
Ying-jeou, who harbors a friendly attitude toward economic ties with
China, won the presidential election. Then, two days after Ma was
elected, the NT climbed to its highest level in more than a decade. The
currency gained 1.1% on the day to reach NT$30.229 against the U.S.
dollar. At that point in the year the NT had gained 6.8%, making it the
second-best performer in Asia after the Japanese yen. Over the
following days the NT dollar continued its charge, breaking the NT$30
barrier at one point on March 27, the first time it had done so since
October 1997.
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