Taiwan dollar off high on c.bank calls, eyes rates

* Taiwan dollar weakens from 11-month closing high

* C.bank urges banks to limit U.S. dollar shorts

* C.bank to announce rate decision, seen unchanged

TAIPEI, Sept 24 - The Taiwan dollar weakened on Thursday after hitting an 11-month closing high in the previous session as dealers trimmed short positions in the U.S. dollar after receiving calls from the central bank.

The central bank has been making moves to ensure the island's trade-reliant economy recovers from its steepest downturn on record by controlling the Taiwan dollar's rise to help exports and maintaining a loose monetary policy.

Later in the day after markets closed, the central bank will announce its rate decision, with economists expecting the main policy rate to be left unchanged at a record low of 1.25 percent.

The Taiwan dollar had softened to T$32.417 to the U.S. dollar by 0240 GMT after finishing Wednesday's session at T$32.369, its strongest close since Oct 7, 2008.

It has gained over 8 percent since March as investors favoured risky assets with the global economy on the mend, but its rise has lagged Asian peers such as the South Korean won <KRW=>.

"The central bank said we've not supposed to leave too many U.S. dollar short positions hanging," said a dealer in Taipei.

"They said our overnight outstanding short positions in the U.S. dollar shouldn't exceed $5 million today. It was $10 million yesterday," the dealer said.

Seven out of 13 dealers contacted by Reuters said they had received phone calls from Taiwan's central bank during Thursday's session enquiring about their U.S. dollar positions.

"(The central bank) hinted that we should trim our U.S. dollars," said a dealer who received a call from the central bank. "We've been receiving their calls since yesterday."

The central bank keeps the Taiwan dollar in a managed float and tries to control fluctuations by buying and selling U.S. dollars in the spot market.

0230 GMT PREVIOUS DAY T$ (Taipei Forex Inc) 32.412 32.369 (close) Volume in $ mln (Taipei Forex Inc) 304 214 T$ (Cosmos) 32.416 32.360 (close) Six-month NDFs <PNDF> -0.600/-0.550 -0.580/-0.545

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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