Taiwan dollar depreciates to weakest level since January 2017

THE Taiwan dollar depreciated to the weakest level in more than 5 years, dragged lower by persistent equity outflows and the surging greenback along with lingering geopolitical tensions with China. The island’s currency dropped as much as 0.6 per cent to 31.858 per dollar, the lowest since January 2017. It has plunged 13 per cent against the greenback year-to-date. Foreign selling of Taiwan equities has reached over US$43 billion so far this year, putting them on track for the biggest ever annual outflow, Bloomberg data show. A widening rate gap with the US due to the Federal Reserve’s aggressive rate hikes is also adding to the downward pressure on the currency. Taiwan’s central bank, on the other hand, lifted its key rate by a modest 12.5 basis points last week in a bid to damp inflation without weighing down its slowing economy. BLOOMBERG