Taiwan cbank to watch forex after Fed cut

TAIPEI: Taiwan’s central bank will watch the island’s foreign exchange market closely, a financial official said on Tuesday, after the Federal Reserve cut its key federal funds rate by 75 basis points in a surprise move.

The Fed’s move came after the Taiwan dollar closed at T$32.439 versus the US dollar, weaker than the previous close of T$32.348. The Taiwan currency had hit a one-week intraday low of T$32.500 earlier in the session after the island’s stocks had joined other regional markets, such as China and India, in falling sharply due to worries over a possible US recession.

Before the Fed’s cut, the Taiwan stock market had plunged 6.5 percent in its biggest daily drop in almost four years. Foreign funds sold T$19.597 billion ($604 million) in Taiwan stocks, the highest amount so far this month after four days of selling. That resulted in fund outflows, pushing the Taiwan dollar lower. reuters