By Crystal Hsu
/ Staff reporter
The New Taiwan dollar weakened past NT$32 per US dollar yesterday for the first time in more than three months, while foreign-exchange reserves posted their steepest monthly decline since March, as a stronger greenback and capital outflows weighed on the local currency. The NT dollar closed at NT$32.025 against the US dollar, down NT$0.095 from the previous session and marking a fourth straight daily loss. It was the weakest closing level since March 25, central bank data showed. Exchange-rate movements across Asia have largely been driven by US dollar strength, the central bank’s Department of Foreign Exchange Director-General Eugene Tsai (蔡炯民) said, adding that the yen has weakened to about ￥162 per US dollar.
New Taiwan dollar banknotes are pictured in Taipei on March 26 last year.
The US dollar’s recent advance reflects shifting expectations for US monetary policy following the US Federal Reserve’s June 17 meeting, as markets reassess the policy path amid efforts to return inflation to the 2 percent target, raising expectations of tighter financial conditions. Tsai said global investors are redeploying funds in search of higher returns amid expectations that the US might tighten policy this year, while elevated valuations in the TAIEX are also weighing on capital inflows.
