P.M. BRIEFING : Taiwan Dollar Drops Record 4%
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TAIPEI, Taiwan — Taiwan’s foreign exchange market plunged into chaos in the last 10 minutes of trading today as the local dollar sharply depreciated in its biggest fall ever, dealers said.
They said in the last 10 minutes government banks, which in the past had tried to slow the depreciation, changed and started to encourage it.
“The market was in chaos. It was a change of policy,” said Tarsicio Tong, chief dealer at Banque Nationale de Paris.
The local dollar closed at 27.50 to one U.S. dollar from 26.4351, a depreciation of about 4%.
“The pressure had built up for too long because of capital outflow,” Tong said.
In the past two months more than $4 billion has flowed out of the country for investment, migration, travel and speculation, bankers said.
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