President Lai addresses Taiwan dollar rise, reassures public on trade talks

Taipei, May 6 (CNA) President Lai Ching-te (賴清德) reassured the public that recent rapid appreciation of the Taiwan dollar against the U.S. dollar was primarily caused by market speculation in conjunction with Taiwan-U.S. talks on tariffs, but his administration would safeguard national interests in negotiations.

In a recorded speech, Lai said on Monday he regrets that market rumors have prompted the public to dump U.S. dollars, rapidly pushing up the Taiwan dollar on Friday and Monday, with the local currency soaring 6.21 percent against the greenback in just two trading sessions.

Local news media cited analysts as saying that expected pressure from the United States to strengthen the Taiwan dollar largely dominated the market, as many Asian countries -- including Taiwan -- aim to reduce their large trade surpluses with Washington ahead of upcoming talks with the U.S.

Lai refuted the market rumor, saying that the latest round of bilateral trade talks did not involve currency issues.

In a statement issued on Monday, the Executive Yuan's Office of Trade Negotiation also stressed that the trade talks concluded on May 1 (U.S. time) in Washington D.C., the first in-person meeting on tariffs between both sides, did not include currency issues.

Taiwan's strong economic performance and healthy forecast were why the forex market expected stronger Taiwan dollar, Lai said, citing the latest GDP data, which showed robust growth of 5.37 percent in the first quarter of this year, following a 4.59 percent increase for all of 2024.

The president said the International Monetary Fund even raised its forecast for Taiwan's GDP growth from 2.7 percent to 2.9 percent for 2025, while downgrading its forecasts for neighboring economies such as Hong Kong, South Korea and Singapore.

Lai urged the people of Taiwan to remain confident in the local economy, even though the impact of a stronger Taiwan dollar may vary across industries.

Meanwhile, Lai said the large trade surplus Taiwan enjoys with the U.S. is not related to currency as it broadly reflects strong demand from American buyers for Taiwan-made high-tech gadgets such as semiconductors, artificial intelligence applications and information and communications devices.

The president said Taiwan is at a critical moment in terms of tariff talks with the U.S., adding when the government's negotiating team faces its American counterpart, Taiwanese negotiators are determined to safeguard the national interest, protect industrial development and not sacrifice any industry.

Although Taiwan was unable to isolate itself from the turbulence on global financial markets after Trump's April 2 tariff announcement, Lai said, the Taiex, the benchmark on the Taiwan Stock Exchange has recovered and returned to 20,000 points after plunging to 17,391.76 on April 9 as foreign institutional investors resumed their buying.

Lai emphasized Taiwan has never been named a currency manipulator by the U.S. so the tariff talks did not touch on the currency issue, urging people with bad intentions not to spread market rumors.

However, Taiwan was named a currency manipulator in 1988 and 1992, and as recently as 2024 was on a monitoring list of currency manipulation.