Perng said the local currency should be decided by the market, adding that the fast depreciation of the local currency will only create uncertainty and instability in the financial markets. Analysts say that the central bank will intervene because letting the NT dollar tumble would erode investor confidence. But they believe the gains of the NT dollar against the greenback may be short-lived because what the central bank intends to do is control the depreciation of the currency rather than stop it.
Some pundits say a weaker currency is needed to help exporters' profits and raise economic growth.
The government has said it expects exports to fall 5 percent this year after growing 22 percent in 2000. Meanwhile, officials at the Ministry of Economic Affairs said devaluation could only help spur exports for a short period of time, and would likely trigger a competitive devaluation of other currencies in the region. This story has been viewed 333 times. The Taipei Times. All rights reserved.