dlr pre 32.860/32.970 / 957/ +9.4

17:01 25Jun09 RTRS-Taiwan dollar at over 1-mth low before rate decision * Central bank steps in to keep Taiwan dollar weak * Taiwan dollar seen between T$32.80 and T$33.0 in near term (Updates to close) TAIPEI, June 25 (Reuters) - The Taiwan dollar weakened on Thursday to a more than one-month closing low as the central bank sold the currency ahead of its decision to leave interest rates unchanged, dealers said. The Taiwan dollar dropped sharply, reaching T$33.10 to the U.S. dollar, in late trade, but recouped part of its losses to end at T$32.970. "The central bank was behind the flow that pushed the Taiwan dollar to T$33.1," said a dealer in Taipei. "But I really have no clue why it wanted to step in today." That price was its weakest finish since May 18 and lower than Wednesday's close of T$32.862. Volume on the main Taipei Forex Inc exchange was moderate at $957 million, higher than $862 million a day earlier. Some dealers said the central bank, which seeks to keep the currency in a managed float, had pushed the Taiwan dollar lower to help offer recession-hit Taiwan exporters a better bidding price as the current quarter comes to an end. Exporters prefer a weaker local currency so they can convert their U.S. dollar earnings into more Taiwan dollars. "Foreign banks bought and sold U.S. dollars today but bought more U.S. dollars after the central bank's intervention in the afternoon," another dealer in Taipei said. Despite the central bank's intervention, the Taiwan dollar, which has been rangebound over the past two weeks, will likely trade between T$32.8 and T$33.0 in the near term, dealers said. Taiwan's central bank on Thursday kept interest rates at a record low of 1.25 percent, as expected, its second straight pause as signs emerge that a slump in the export-led economy is bottoming out. [ID:nTPU001455] In the non-deliverable forwards (NDF) market, six-month NDFs narrowed to -0.550/-0.480 from -0.580/-0.530 in the previous session, meaning that investors had bet the local currency would firm by a smaller degree in half a year. On the smaller Cosmos exchange , the Taiwan dollar weakened to T$32.945 to the U.S. dollar from the previous close of T$32.855. (Reporting by Rachel Lee and Gina Chang; Editing by Ken Wills) ((gina.chang@thomsonreuters.com; +886 2 2508-0815; Reuters Messaging:gina.chang.thomsonreuters.com@reuters.com)) ((If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com)) Keywords: MARKETS TAIWAN CURRENCY/
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