TWD 18 Nov

16:47 18Nov2008 RTRS-Taiwan dollar near 3-wk low due to economic fears

(Updates to close)
TAIPEI, Nov 18 (Reuters) - Taiwan's dollar fell to a near three-week closing low on Tuesday on worries about the local economy as Japan and other countries have tipped into recession, but exporters and the central bank helped limit the fall.
The Taiwan dollar hit a low of T$33.290 to the U.S. dollar, but recouped losses to end at T$33.234, its weakest finish since Oct. 29, still lower than T$33.170 a day earlier.
Volume on the main Taipei Forex Inc exchange was light at $793 million, but higher than Monday's $487 million.
"The performance of local stocks was bad today and foreign banks were buying the U.S. dollar," said a dealer at a local bank.
Concerns about the island's economy dragged local stocks <.TWII> to a more than five-year low on Tuesday, with chip bellwether TSMC <2330.TW> dampening sentiment as it said it would freeze hiring.
Foreign institutions sold a net T$4.3 billion ($129 million) worth of Taiwan stocks on Tuesday, and have unloaded about T$40 billion so far this month.
In the non-deliverable forwards market, six-month NDFs narrowed to -0.200/-0.140 from -0.260/-0.210 in the previous session, implying the Taiwan dollar will likely firm less in half a year.
However, the Taiwan dollar's fall was tempered as exporters purchased the local currency at around T$33.260 and after the central bank stepped in to keep the Taiwan dollar in a narrow range, dealers said.
Exporters usually trade when the Taiwan dollar weakens because they can convert their U.S. dollar earnings to more of the local currency.
Since rallying to a 10-1/2-year high in late March, the Taiwan dollar has since fallen about 11 percent, largely because foreign investors have been pulling out of the local stock market amid a world financial crisis.
On the smaller Cosmos exchange , the Taiwan dollar softened to T$33.223 to the U.S. dollar, from the previous close of T$33.169.
(Reporting by Gina Chang and Jeanny Kao; Editing By Keiron Henderson)
((chyenyee.lee@thomsonreuters.com; +886 2 2508-0815; Reuters Messaging: chyenyee.lee.reuters.com@reuters.net))

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Tuesday, 18 November 2008 16:47:20RTRS [nTP314548] {EN}ENDS