The New Taiwan Dollar (TWD) has exhibited notable resilience, bolstered by recent economic projections from Taiwan's central bank. On September 18, 2025, the central bank raised its economic growth forecast for 2025 to 4.55%, up from 3.05%, highlighting the strength of exports, particularly in the semiconductor sector. Despite maintaining the benchmark interest rate at 2%, this optimistic outlook supports expectations for ongoing currency appreciation.
In recent months, the TWD gained over 9% against the USD by early May, largely due to disrupted exports from China and adjustments in USD hedges. However, this strength has raised concerns among Taiwanese exporters, especially tech leaders like TSMC, regarding potential competitiveness challenges. Additionally, the local insurance sector has faced profitability issues attributed to the TWD's rise, prompting Fitch Ratings to put several insurers on 'Rating Watch Negative.'
Market analysts, such as those from Bank of America, foresee further TWD strength in the latter half of 2025, mainly driven by robust export performance and corporate hedging activities. Current exchange rates indicate that TWD to USD is at 0.032354, which is 1.5% below its three-month average of 0.03284, having fluctuated within a narrow range of 3.8%. Against the EUR, the TWD trades at 0.028147, close to its average, while its value against the GBP is at 0.024790, 1.3% above the three-month average. Notably, TWD to JPY is at 4.9858, exceeding its average by 1.6%, demonstrating relative stability across a 4.5% range.
Overall, the TWD showcases a complex interplay of growth expectations, currency strength, and market factors that may shape its trajectory in the near future. Businesses and individuals engaged in international transactions should remain cognizant of these developments to optimize their currency exposure and transaction costs.
