Taiwan’s central bank intervention played a critical role in stabilizing the New Taiwan dollar during the first half of 2025. According to a report submitted to the Legislative Yuan, the central bank bought US$13.25 billion more than it sold to prevent the local currency from appreciating too quickly.
The report indicated that the purchases aimed to smooth volatility in the local foreign exchange market. Central bank Governor Yang Chin-long is scheduled to discuss these measures at a Legislative Yuan Finance Committee hearing.
Between January and June, the US dollar fell 9.63 percent against the NT dollar amid uncertainties over U.S. President Donald Trump’s policies. The US dollar index, tracking its value against six major trading partners, dropped 10.70 percent over the same period.
Foreign institutional investors also boosted NT dollar supply by investing large funds into the local market, contributing to the greenback’s weakness. Analysts said central bank intervention prevented the US dollar from falling further, particularly in May.
In that month, the central bank purchased US$10.12 billion to limit NT dollar appreciation. This represented the fifth-largest monthly increase in Taiwan’s foreign exchange reserves historically. Officials emphasized that these actions reflect a two-way market strategy.
“If the US dollar rises sharply, we will sell greenbacks to prevent the NT dollar from depreciating too much,” the report said.
The report further noted that as of mid-October, the US dollar had fallen 6.95 percent this year against the NT dollar. Foreign investors continued to make net purchases in the local stock market, reinforcing NT dollar strength.
The central bank highlighted that the NT dollar’s fluctuations remain smaller than major currencies like the euro, yen, and won. Officials attributed the currency’s resilience to Taiwan’s strong economic fundamentals.
Economists emphasized that the central bank intervention showcases Taiwan’s proactive approach to maintaining market stability. They expect authorities to continue monitoring currency trends closely and intervene when necessary to protect the economy.
Central bank intervention has proven essential in balancing foreign exchange market pressures while supporting investor confidence. Officials plan to maintain flexible measures as global currency volatility persists.
