Twn dlr 0403 (+4.78)

17:13 03Apr09 RTRS-Taiwan dlr soars to 2-1/2-mth high on stocks, flows * Taiwan dollar up on prospects for economic turnaround * Highest closing price since Jan. 16 * Central bank active in buying U.S. dollars to curb gains (Updates to close) TAIPEI, April 3 (Reuters) - The Taiwan dollar rose on Friday, for a fourth straight session to a 2-1/2-month closing high on exporter purchases and stocks that rallied on economic turnaround prospects, but the central bank capped gains. The Taiwan dollar rose to an intraday high of T$33.202 against the U.S. dollar before falling back to a final price of T$33.380. That was higher than Thursday's close of T$33.580, when it logged its biggest gain in nearly four months. "The reason is that foreign funds are coming in, as they have more confidence in the economy," said a dealer in Taipei. "But the central bank did what it had do to." Volume on the main Taipei Forex Inc exchange was heavy at $2.062 billion, up from $1.9 billion a day ago. Taiwan stocks <.TWII>, which rose 1 percent on Friday to six-month closing highs, boosted the local currency. Stock gains were led by financial shares on signs the U.S. economy is stabilising and after world leaders clinched a $1.1 trillion deal to revive the global economy. Foreign funds bought a net T$4.8 billion ($144 million) in Taiwan stocks on Friday and have bought a net T$11.1 billion so far this month. Exporters, which prefer a weaker currency to buy more of it for cash needs at home, bought Taiwan dollars en masse on Friday due to fear that the rate would continue rising, a dealer said. "At the price T$33.5, exporters get scared," the dealer said. Dealers said the central bank was active during the session as it tried to keep the Taiwan dollar's exchange rate stable. Taiwan's central bank steers the local currency in a managed float, and sometimes intervenes in the foreign exchange market to pare any fluctuations it feels is excessive. It has recently sought to help the island's recession-strapped exporters. The central bank was already actively curbing sharp gains in the Taiwan dollar on Thursday, dealers said, and was behind half of the session's volume. [ID:nTPU001254] On the smaller Cosmos exchange , the Taiwan dollar closed at T$33.270, compared with Thursday's final price of T$33.300. (Reporting by Ralph Jennings and Argin Chang, Editing by Jacqueline Wong) ((ralph.jennings@thomsonreuters.com; +886 2 2500 4882; Reuters Messaging: ralph.jennings.reuters.com@reuters.net)) ((If you have a query or comment on this story, send an email to newsfeedback.asia@thomsonreuters.com)) Keywords: MARKETS TAIWAN CURRENCY/
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