TWD 27 Oct

16:56 27Oct2008 RTRS-Taiwan dollar at near 3-year low on stocks, fund outflows

(Updates to close)
TAIPEI, Oct 27 (Reuters) - The Taiwan dollar hit its lowest level in nearly three years as foreign investors dumped stocks amid a global selloff triggered by the financial crisis, but central bank intervention and purchases by exporters helped cushion losses.
The currency fell as low as T$33.519 to the U.S. dollar in early trade on Monday, but pared some losses to end at T$33.497, its weakest finish since Dec. 13, 2005. It ended the previous session at T$33.412.
"Foreign investors were actively pulling out as the stock market fell," said a dealer at a local bank.
Taiwan stocks <.TWII> tumbled 4.65 percent to a fresh five-year closing low on Monday, after the government ended a rule that halved the daily downside limit, playing catch-up with last week's losses in other global markets.
Foreign institutions sold Taiwan stocks in an eighth session on Monday, unloading a net T$6.6 billion ($197 million), and have been actively selling T$441 billion so far since June.
Oil companies also bought U.S. dollars, said another dealer in Taipei. Those companies need U.S. dollars for foreign purchases of goods such as crude oil.
But the central bank stepped in to keep the Taiwan dollar from falling too much, dealers said.
"Trading volume was small today. That implied investors were less willing to enter the market because of central bank intervention," the first dealer said.
Volume on the main Taipei Forex Inc was soft at $899 million, lower than $1.113 billion the previous session.
The Taiwan dollar also recouped some losses as exporters bought the local currency near the end of the month for cash needs at home, the dealer said.
Since hitting a 10-1/2-year high in late March when investors bet that the economy would improve after cross-Strait relations thawed, the Taiwan dollar has lost 12 percent, mainly due to foreign investors pulling out.
On the smaller Cosmos exchange , the Taiwan dollar weakened to T$33.515 to the U.S. dollar from Friday's close of T$33.462.
(Reporting by Gina Chang and Lin Miao-jung; Editing by Jan Dahinten)
((chyenyee.lee@thomsonreuters.com; +886 2 2508-0815; Reuters Messaging: chyenyee.lee.reuters.com@reuters.net)) Keywords: MARKETS TAIWAN CURRENCY/

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Monday, 27 October 2008 16:56:05RTRS [nTP109110] {EN}ENDS