MONEY MOVES Anxious Taiwan citizens who stampeded banks to buy US dollars will pay dearly for their lack of confidence in the island's future, Taiwan money-men have said.
Early estimates by the Central Bank of China indicate as much as US$5 billion (HK$38.65 billion) left the island's monetary system in the form of dollars or non-cash transfers, after Beijing announced its missile test-firings.
One banker said: 'These people paid up to NT$28 per dollar for their dollars the week before last, already considerably above the exchange rate.
'They will lose even more if and when they want to sell the greenbacks back, as the NT dollar is appreciating and most banks add a two per cent surcharge on purchases of foreign currency in cash, as it's costly for them to hold cash.' The bank estimates Taiwan's foreign exchange reserves were down to over US$84 billion by the end of last week, compared with US$90 billion at the end of February.
The decision by Washington to send aircraft carriers helped restore confidence, while the central bank defended the New Taiwan dollar at the NT$27.50 to US$1 level and the Government used a NT$200 billion fund to stabilise the stock market.
A central bank economist said capital was returning, as shown by the resurgence of the New Taiwan dollar, which had risen to NT$27.28 by noon yesterday.
