Taiwan dollar ends flat after hitting 3-week high

* Taiwan dollar ends flat after hitting 3-week intraday high

* C.bank warning speculators, helping importers: dealers

* General consensus is for Taiwan dollar to weaken: dealer

TAIPEI, Feb 6 - The Taiwan dollar <TWD=TP> pared gains after rising to a three-week intraday high, a move three traders attributed to central bank intervention aimed at discouraging speculation in the currency.

The currency rose to as high as T$31.70, its strongest intraday level since Jan. 15, before paring gains to end the session largely flat at T$32.184.

"Everyone seems set on thinking that the central bank wants the Taiwan dollar to weaken, so that may attract some investors who think that the course is set," said a dealer in Taipei. "This seems to be their way of telling them to stop speculating."

Taiwan's central bank has been ratcheting up pressure on speculators, whose actions it fears could damage the economy. It has imposed measures to control the inflow of so-called "hot money" into the island.

Russia and Brazil are among others who have imposed similar controls on speculative inflows, which some economists say can create potentially destructive bubbles in property and stock markets.

Taiwan's central bank manages the Taiwan dollar in a controlled float, and sometimes intervenes, buying or selling the local currency to pare fluctuations it deems excessive.

"The general consensus out there is that the Taiwan dollar is still going to weaken in the long run," said another dealer at a local bank in Taipei. "This behaviour was really out of the ordinary, and is unlikely to be repeated again."

In 2009, the Taiwan dollar was one of Asia's weakest performing currencies, underperforming most of its peers as heavy intervention kept gains for the year to just 2.6 percent.

The traders added the central bank may also be moving to help importers, for whom a stronger local currency is good as it allows them to procure more products for the same amount of local currency.

"Importers have been missing from the foreign exchange market for a while now," said another trader. "This is probably a bit of space to help them first."

The island's foreign exchange and equities markets are open on Saturday to make up for an additional holiday on Feb 19 during the New Year holidays.

0800 GMT PREVIOUS DAY T$ Volume in $ mln T$ Six-month NDFs <PNDF> -0.480/-0.430 -0.480/-0.430

Note: Taipei Forex Inc is Taiwan's main forex exchange; Cosmos is a smaller exchange

Source: NDFs quotations from Prebon Asia

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