Taiwan dollar fell 5.29% in 1H 2024 despite Central Bank intervention

Taipei, Oct. 16 (CNA) The New Taiwan dollar dropped over 5 percent against the U.S. dollar in the first half of this year, even as Taiwan sold a net US$9.06 billion to stabilize the exchange rate, the Central Bank said on Wednesday.

In a written report submitted to the Legislature, the Central Bank said factors acting on Taiwan's foreign exchange market in the first half of 2024 mainly originated in the United States.

These included the continued resilience of the U.S. economy, delayed and smaller-than-expected interest rate reductions by the Federal Reserve, and rises in U.S. bond yields and the U.S. dollar index, the report said.

During the first half of this year, Taiwan's forex market saw excess demand for U.S. dollars, driving the New Taiwan dollar down 5.29 percent and prompting the Central Bank to intervene by selling a net US$9.06 billion to bolster Taiwan's currency, the report said.

By comparison, the Central Bank sold a net US$2.77 billion in the foreign exchange market over the whole of 2023, during which time the New Taiwan dollar fell by 0.09 percent.

Despite its depreciation, the New Taiwan dollar's performance from Jan. 1 to Oct. 14 this year -- a 4.45 percent drop against the US dollar -- was better than that of the South Korean won and Japanese yen, which fell by 5.20 percent and 5.82 percent, respectively, the Central Bank said.

Central Bank chief Yang Chin-long (楊金龍) is scheduled to brief the Legislative Yuan's Finance Committee on the report on Thursday.