Taiwan dollar hits 2-week closing low on fund outflows

* Taiwan dollar down for third straight session

* Fund outflows and c.bank moves push T$ lower

* Exporters limit Taiwan dollar weakness (Updates to close)

TAIPEI, Sept 28 - The Taiwan dollar <TWD=TP> fell to its lowest closing level in nearly two weeks on Monday as a fall in local stocks triggered funds to flow out of the economy.

Dollar selling by exporters prevented a steeper loss but the central bank was spotted buying U.S. dollars actively just before the close.

The Taiwan dollar fell to T$32.475, its lowest closing level since Sept. 16 and its third straight session of losses.

"There were some fund outflows in the local stock market, which lost steam today," said a dealer in Taipei.

"The trade was quiet as investors mostly adopted a wait-and-see stance as they anticipated the U.S. dollar will weaken more, but in the meantime, there is little evidence that risky assets are worth investing in."

Foreign investors, net sellers for a third consecutive session, sold T$1 billion ($31 million) in stocks <.TWII> on Monday. [ID:nTP122059]

Dealers said the Taiwan dollar is expected to trade between T$32.400 and T$32.500 on Tuesday.

0800 GMT PREVIOUS SESSION T$ (Taipei Forex Inc) 32.475 32.428 Volume in $ mln (Taipei Forex Inc) 700 723 T$ (Cosmos) 32.472 32.428 Six-month NDFs <PNDF> -0.570/-0.520 -0.600/-0.550

Note: Taipei Forex Inc is Taiwan's main forex exchange; Cosmos is a smaller exchange. Both exchanges close at 0800 GMT.

Source: NDFs quotations from Prebon Asia

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