The NTD is continually weakening despite a massive boost to exports from the semiconductor sector because of currency outflows from foreign entities cashing out on dividends. Those familiar with the recent history of other East Asian currencies will know this is largely similar to what happened with Korea (since then the outflows for Korea have abated, however).
Unlike Korea, Taiwan’s central bank is actively supporting this depreciation through encouraging domestic entities to keep their money in foreign assets versus local assets. Apart from asking local banks to execute sell orders on the day they are received as detailed in the article, they’ve also deregulated insurance companies and tapped foreign reserves to keep the NTD from rising too much.
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The NTD is continually weakening despite a massive boost to exports from the semiconductor sector because of currency outflows from foreign entities cashing out on dividends. Those familiar with the recent history of other East Asian currencies will know this is largely similar to what happened with Korea (since then the outflows for Korea have abated, however).
Unlike Korea, Taiwan’s central bank is actively supporting this depreciation through encouraging domestic entities to keep their money in foreign assets versus local assets. Apart from asking local banks to execute sell orders on the day they are received as detailed in the article, they’ve also deregulated insurance companies and tapped foreign reserves to keep the NTD from rising too much.