The Taiwan dollar surged past the so-called 'Perng Fai-nan' barrier of NT$31 against the U.S. greenback at one point Monday amid an influx of hot money, but it weakened later in the session to close at NT$31.250, thanks to the intervention of the Central Bank of the Republic of China (Taiwan). Central bank Governor Perng Fai-nan reportedly chaired a brainstorming session with the heads of the bank's currency affairs and market research departments Monday evening to assess the direction of hot money flows. They also plotted new strategies on working with other Asian central banks to protect the local currency from hot money attacks. The following are excerpts from local media coverage of the issue: Economic Daily News: Banking sources said the central bank pumped at least NT$20 billion into the foreign exchange market Monday to stabilize the Taiwan dollar's exchange rate against the greenback. The local currency appreciated NT$0.3 to hit NT$30.976 -- the highest level since August 2008 -- at one point, but then weakened amid central bank intervention. At the end of the day, the local currency had only gained NT$0.06 over the previous trading session to close at anearly 25-month high of NT$31.25. Local currency dealers said the Taiwan dollar has ranged between NT$31 and NT$34 to the greenback over the past two years, indicating that the central bank will not stand aside and allow the currency to spike past NT$31, a level known as the 'Perng Fai-nan' barrier. When asked about her view of the Taiwan dollar's recent upward trend, Christina Liu, chairwoman of the Council for Economic Planning and Development, said that given Taiwan's steady economic recovery, it was only natural for the Taiwan dollar to appreciate because currency values tend to reflect countries' economic situation. Market analysts said a combination of factors have contributed to the Taiwan dollar's appreciation in recent days. A major cause was the central bank's decision to raise its key interest rates by 0.125 percentage points from Oct. 1. That fueled an influx of hot money because other Asian countries such as South Korea and Malaysia have suspended interest rate adjustments. Another factor is that the local currency has appreciated by only 2.44 percent against the dollar since the beginning of this year, a range far smaller than the Japanese yen's rise of 10.46 percent, the Thai baht's appreciation of 8.9 percent and the Korean won's rise of 3.57 percent. According to economic officials, the Taiwan dollar's 1.5 percent rise in value over the past two weeks has helped cushion domestic inflationary pressures fueled by recent hikes in raw materials prices in global markets. (Oct. 5, 2010). Commercial Times: With a listless greenback, Asian central banks have had a hard time protecting their currencies from appreciating too drastically amid an influx of hot money. Market sources said signs have become more palpable that Asian central banks might be losing the battle to prevent hot money attacks on their currencies. On Monday, the Korean won rose to a five-month high of 1,122.3 against the greenback, breaking the Korean central bank's target of keeping the won below the 1,130 level. Despite the Thai central bank's intervention, the baht still surged past the 30.15 barrier to hit a 13-year high of 30.05 Monday. In Taiwan, central bank officials are working on new strategies to cooperate with other Asian central banks to stabilize the Taiwan dollar's exchange rate, senior bankers said. According to statistics released by the Financial Supervisory Commission (FSC) , inbound foreign exchange remittances amounted to US$2.35 billion in September, a five-month high. Accumulated capital inflows for the first nine months of this year hit US$157.78 billion, according to FSC statistics. (Oct. 5, 2010). 