Taiwan's New Taiwan Dollar Surge: What's Driving the Rise?

Experts Weigh In on the NTD's Strength and Its Impact on Taiwan's Economy.

The New Taiwan Dollar (NTD) experienced a significant surge today, reaching a 16-month high and trading in the 31.1 range. This appreciation is raising concerns about its potential impact on Taiwan's exports.

According to Wu Da-jen, a professor at the Department of Economics at National Central University, the rapid appreciation of the NTD could lead to substantial exchange rate losses for exporting companies, potentially turning profits into losses. Coupled with existing pressures from high tariffs, the stronger NTD adds further challenges for exporters, potentially driving some to seek opportunities elsewhere.

However, Professor Wu believes the current NTD surge is unlikely to be directly linked to pressure from the United States. He suggests that the US is not currently focused on Taiwan's currency. He attributes the recent fluctuations primarily to the inflow and outflow of foreign capital. He posits that the current surge is likely driven by speculative factors, and that the Central Bank is taking the opportunity to intervene and counter short-term speculative trading.