New Taiwan Dollar General Info
One Taiwan dollar is subdivided into 100 cents. Conveniently, when shopping in Taiwan, cents are rarely needed because virtually all products sold in the country are priced in whole dollars.
The official name of Taiwan’s currency is the ‘New Taiwan Dollar’, although the prefix ‘New’, which distinguishes the current currency from the original Taiwan dollar used in and prior to 1949, is used only in very formal settings, such as in legal contracts.
Taiwan’s central bank, the Central Bank of the Republic of China (Taiwan), operate a flexible exchange rate system, which means that the Taiwan dollar’s valuation is, for the most part, determined by market forces. The bank’s policy does state, however, that they will intervene in foreign exchange markets “when the market is disrupted by seasonal or irregular factors.”
Historically, the US dollar to Taiwan dollar exchange rate has met strong resistance at 35.0. Several times since the late 1990s USD/TWD has reached close to, or slightly breached, the 35.0 level, but each time the rate has reversed strongly.
Since 1990, the Taiwan dollar’s absolute lowest valuation came in March 2009 when USD/TWD reached 35.24. The currency was strongest in July 1992 when USD/TWD fell to just 24.50.TWD Foreign Transfers TWD Travel Money Read our Travel Guide to Taiwan
New Taiwan Dollar - Recent Performance
The Taiwan dollar had a storming start to 2017, gaining 9% against the dollar between January and mid-May, but since then the currency has, for the most part, drifted sideways. A USD/TWD rate in the final week of October of 30.26 was little changed on rates from the final week of May (roughly 30.16).
The Taiwan dollar was at least moving against the Japanese yen, against which it climbed in late October to a five-month high of 3.772. The Taiwan dollar is now 4.2% higher on the year against the yen and 5.2% higher than its September lows. However, much of the Taiwan dollar’s appreciation versus the yen is driven by the yen side. October’s re-election of Shinzo Abe as Japanese Prime Minister will preserve “Abenomics” and aggressive stimulus by the Bank of Japan, and this has led to broad yen weakness.
In late October, the Taiwan dollar strengthened against the euro to levels unseen since July. EUR/TWD fell hard on October 26th to 35.27 after the ECB’s announcement that it would proceed cautiously with the normalization of monetary policy – specifically, that there would be no “sudden end” to the bank’s quantitative easing program and that low interest rates would be preserved “well past” QE’s eventual termination date.