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speculation in a bid to prevent the US dollar from falling further
against the local unit. On its website, the central bank cited
comments supporting capital intervention by economist Joseph
Stiglitz, a move which dealers saw as a clear hint it did not want
the greenback to fall further. 'Be careful. You may be getting the
easy money, but it's overnight money. You don't build robust growth
based on easy money,' Stiglitz, a Nobel laureate, was quoted as
saying. Taiwan's trade-dependent economy saw exports drop 29.6 per
cent in the first nine months of the year from the same period last
year, and is keen to protect its competitiveness by keeping its
currency from strengthening too much. The Taiwanese central bank
also ran statements from the United Nations and the Group of Seven
finance ministers expressing similar warnings against speculative
activity in the exchange market. 'The central bank's move is a
strong warning that it doesn't want to see hot money impact the
market,' said a trader of a local bank who asked not to be named for
fear he might attract the central bank's attention. He said the
central bank tends first to see if words alone are enough to change
market behaviour, before resorting to actual intervention. 'The
US dollar stopped falling today. That means the warning was
effective. There was little sign of central bank intervention today,'
the trader said. 'But if foreign funds continue to flow in and
boost the local currency, I don't think the central bank will
tolerate it,' he added. The greenback closed at 32.240 Friday
against the Taiwan dollar, up from Thursday's close of 32.143.
