tw dlr 0317

16:50 17Mar09 RTRS-Taiwan dollar closes at 1-mth high, but c.bank intervenes * Taiwan dollar at one-month high on fund inflows * Central bank caps gains actively before close (Updates with close, quotes) TAIPEI, March 17 (Reuters) - The Taiwan dollar rose sharply to a one-month high on Tuesday as foreign funds bought into the currency on signs of a stabilising global economy, which will help the island's key export sector. Minutes before the close, the Taiwan dollar rose to an intraday high of T$34.180, the highest level since Feb. 16, but the central bank bought U.S. dollars right after, causing the currency to end at T$34.278, the strongest finish since Feb. 13. "The central bank withdrew its U.S. dollar bids at around T$34.280, causing some panic selling in U.S. dollars and pushing the Taiwan dollar to T$34.180," said a dealer in Taipei. "But the central bank came in at the very last minute, helping cap the Taiwan dollar's gains. Some of us suffered losses." The Taiwan dollar has gained 2.5 percent since hitting a 22-year low earlier in March, mainly boosted by brisk foreign fund inflows and exporters selling U.S. dollar earnings from rush orders. Volume on the main Taipei Forex Inc exchange was active at $1.244 billion, up sharply from a light $813 million the previous session. Dealers said the central bank, which keeps the Taiwan dollar in a managed float, tempered any further gains in a bid to keep the local currency's exchange rate relatively weak to help the island's exporters. The Taiwan dollar also took cues from the South Korean won as both economies share similar export-reliant trade profiles that rely heavily on their respective tech industries. On Tuesday, the won hit its strongest closing high in more than a month, helped by temporary signs of stability in the global financial sector. On the smaller Cosmos exchange , the Taiwan dollar ended at T$34.180, higher than the previous day's close of T$34.390. (Reporting by Lee Chyen Yee and Jeanny Kao; Editing by Nick Macfie) ((chyenyee.lee@thomsonreuters.com; +886 2 2508-0815; Reuters Messaging: chyenyee.lee.reuters.com@reuters.net)) Keywords: MARKETS TAIWAN CURRENCY/
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