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17:07 13Mar09 RTRS-Taiwan dollar off 3-wk closing high on c.bank moves * U.S. dollar buying by central bank pares gains * Foreign fund inflows provided support * Dealers expect Taiwan dollar to be roughly flat next week (Updates with closing values) TAIPEI, March 13 (Reuters) - The Taiwan dollar pulled back on Friday from a three-week closing high in the previous session as the central bank capped gains caused by foreign fund inflows into the rising stock market. The Taiwan dollar rose to a high of T$34.388 in morning trade, but later reversed course to close the session at T$34.495, little changed from Thursday's close of T$34.494. Volume on the main Taipei Forex Inc exchange was moderate at $1.032 billion, higher than the $851 million recorded the previous day. "The central bank was limiting any potential gains from foreign fund inflows," said a dealer in Taipei. "The South Korean won and the Singapore dollar also went in different directions today, so there wasn't a clear direction." South Korea's won rose against the U.S. dollar on Friday on hopes that the U.S. economy and ailing banking sector may be stabilising, while the Singapore dollar dropped amid fear of central bank intervention. [nSP438279] Fund inflows fuelled most of the day's gains in the Taiwan dollar, with foreign funds buying a net total of T$11.43 billion ($331 million) worth of shares, pushing Taiwan's main share index <.TWII> 3 percent higher. However, U.S. dollar buying by the central bank kept those gains in check. The central bank keeps the Taiwan dollar in a managed float and sometimes intervenes to taper any massive swings in the local currency. Dealers said they expect the Taiwan dollar to remain flat next week, trading at around T$34.5. "Unless the South Korean won continues to climb like it did today, there shouldn't be too many surprises and things should remain flat next week," said another dealer. On the smaller Cosmos exchange , the Taiwan dollar closed at T$34.475, stronger than Thursday's close of T$34.486. (Reporting by Kelvin Soh; Editing by Kim Coghill) ((kelvin.soh@thomsonreuters.com; +886 2 2508 0815; Reuters Messaging: kelvin.soh.reuters.com@reuters.com)) Keywords: MARKETS TAIWAN CURRENCY/
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