Taiwan's dollar at six month low on exports

Taiwan's dollar dropped to a six-month low after the government reported the slowest growth in export orders in five years.

The currency fell for a second day as a global slowdown prompts overseas consumers to rein in spending on computers, cell phones and flat-panel displays produced in Taiwan. The European and Japanese economies shrank in the second quarter, while U.S. retail sales fell in July, official figures show.

"The export orders are very much in line with the slowdown in external demand," said Irene Cheung, a strategist at ABN Amro Bank NV in Singapore. "It'll continue to play out and we'll see further depreciation in the Taiwan dollar."

The currency closed 0.2 percent weaker at NT$31.489 against the dollar as of 4 p.m. local time, according to Taipei Forex Inc. It earlier fell as much as 0.5 percent to NT$31.571, the weakest since Feb. 21. Nine of the 10 most-traded Asian currencies outside Japan declined against the dollar, according to Bloomberg data.

Export orders, indicative of actual shipments over the next one to three months, rose 5.5 percent from a year earlier in July, the Ministry of Economic Affairs said Monday after local markets closed. That was the smallest increase since May 2003, when the spread of the deadly severe acute respiratory syndrome virus curbed spending across Asia.

Industrial output grew 1.1 percent, the slowest pace of expansion since March 2007.

Meanwhile, the island's central bank yesterday said in a faxed statement the Taiwan dollar was "relatively stable." It was the second straight day the monetary authority in Taipei made such a comment.

The Korean won, the Singapore dollar and the euro all posted steeper declines yesterday, according to the Central Bank of the Republic of China (Taiwan).