Taiwan Dollar's Decline Caused by Fund Outflows, Times Reports

By Yu-huay Sun

Aug. 15 (Bloomberg) -- The Taiwan dollar's decline this month was caused by foreign fund outflows, including those made by Royal Philips Electronics NV, the Commercial Times reported, citing an unidentified central bank official.

Some custodian banks for overseas investors remitted more than $1 billion in total yesterday, while the central bank wasn't active in the currency market, the Chinese-language newspaper said, citing unidentified currency traders. Philips, Europe's biggest maker of consumer electronics, repatriated proceeds from selling shares in Taiwan Semiconductor Manufacturing Co., the Taipei-based Times said.

The Taiwan dollar fell to a five-month low of NT$31.305 yesterday before closing at NT$31.24 to the U.S. dollar, according to Taipei Forex Inc. The currency has fallen 2.1 percent this month.

Philips sold about 383 million common shares of Taiwan Semiconductor for about 455 million euros ($672 million), the Amsterdam-based company said yesterday. Philips said it no longer holds any shares of the Hsinchu, Taiwan-based company.

To contact the reporter on the story: Yu-huay Sun in Taipei at ysun7@bloomberg.net