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Taiwan Dollar Surges 5% to NT$30 After Central Bank Intervention Amid Trade Talks and Asian Currency Rally

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Updated May 8, 2025, 04:25 AM

The New Taiwan dollar experienced an unprecedented surge, rising as much as 5% on May 5 and 6, marking its largest intraday and two-day gains in over three decades. This rally, described by some analysts as an 'Asian crisis in reverse,' was driven by speculation that Taiwanese exporters were rapidly converting US dollar holdings into the local currency amid expectations that Taiwanese authorities might allow further appreciation to facilitate trade negotiations with the United States. The surge in Taiwan's currency also influenced other Asian currencies, including the Hong Kong dollar, which appreciated alongside it, contributing to downward pressure on the US dollar. Taiwan's foreign exchange reserves stood at $582.8 billion by the end of April 2025, reflecting the island's substantial trade surplus. Despite the currency's sharp rise, Taiwan's Central Bank and government officials denied that the US had pressured Taiwan to adjust its exchange rate during recent tariff talks. The Central Bank intervened to stabilize the market after the New Taiwan dollar hit NT$30 per US dollar, demanding an end to market disorder. The rapid appreciation has had mixed effects on Taiwanese exporters, with some industries, such as printed circuit boards, experiencing profit erosion, while others like Chunghwa Telecom reported no impact. Taiwan's airline stocks benefited from the stronger currency. The surge has raised concerns about a potential broad sell-off of the US dollar, with analysts warning of a possible $3.2 trillion 'avalanche' of dollar selling triggered by USD-rich Asian economies. The Taiwan dollar's rise signals a potential shift in global currency dynamics and trade realignment, although Taiwan remains confident it will not be labeled a currency manipulator by the US.

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