Taiwan Central Bank Deploys Three Measures to Steady Currency a Year After Sharp Rally

The New Taiwan dollar surged in May 2025 in a move the market dubbed a “violent appreciation,” as large short-term capital flows disrupted exporters’ pricing, corporate hedging and investor expectations. A year later, the Central Bank of the Republic of China (Taiwan) is again under scrutiny over how it will balance exchange-rate flexibility with financial stability.

The recent war in the Middle East has boosted demand for safe-haven assets, while a stronger U.S. dollar has put depreciation pressure on the New Taiwan dollar. The central bank has adopted three measures: intervening in the market, requiring foreign capital inflows to be invested in equities, and stepping up communication with exporters. Volatility in the New Taiwan dollar remains manageable compared with other Asian currencies.