TAIPEI (Taiwan News) — The New Taiwan dollar rose 3.07% on Friday, prompting the Central Bank to intervene in the foreign exchange market to stabilize conditions.
The New Taiwan dollar surged in early trading, breaking through NT$32 and climbing past NT$31.5 to an intraday high of NT$31.14, its strongest level since early 2024. A lower exchange rate number reflects a stronger New Taiwan dollar, as fewer units are needed to purchase one US dollar.
In a statement issued Friday evening, the Central Bank cited three main factors behind the currency’s sharp appreciation. The first was media speculation since April that the US might seek stronger currencies from trade partners as part of tariff negotiations, per CNA.
Currency appreciation means a unit of one currency can buy more of another, and expectations of such moves have fueled demand for the New Taiwan dollar. However, Central Bank Governor Yang Chin-long (楊金龍) clarified in both a legislative session and a Thursday statement that the US Treasury has made no such request.
The second factor was a strong performance in Taiwan’s stock market, where the benchmark index closed up 552.61 points. Foreign investors recorded a net buy of NT$42.9 billion (US$1.4 billion), increasing the supply of US dollars and supporting the New Taiwan dollar’s rise.
Third, the bank noted the New Taiwan dollar has shown greater stability against the US dollar than many other major currencies.
The Central Bank confirmed it had intervened to preserve orderly market functioning. It reaffirmed its commitment to maintaining dynamic stability and said it would continue monitoring international financial conditions.
While currency strength can benefit importers and ease inflation, analysts warned that sustained appreciation may hurt Taiwan’s export-driven economy. A further rise beyond the NT$30 mark could lead to serious foreign exchange losses for exporters, according to Storm Media.
Life insurance companies, which hold significant assets in foreign currencies, also face risks from valuation losses if the New Taiwan dollar rises too quickly. Rapid appreciation could erode investment returns and place additional pressure on financial institutions already navigating global economic uncertainty.
