Outlook
The TWD is expected to stay broadly stable into 2026, supported by a cautious monetary stance and solid export performance. DBS Bank expects Taiwan's policy rate to remain at 2.00% throughout 2026, reflecting low inflation and stable growth. The mandatory clearing regime for TWD interest rate swaps, implemented on July 1, 2025, improves market transparency and liquidity management. The Chung-Hua Institution for Economic Research projects the TWD to appreciate toward 29.42 per USD in 2026, signaling limited depreciation risk. Overall, the currency has shown resilience amid global FX volatility, underpinned by robust exports and sound fundamentals.
Key drivers
- DBS Bank’s view of a 2.00% policy rate through 2026 supports a stable monetary backdrop for the TWD.
- Mandatory clearing for TWD interest rate swaps enhances market transparency and regulatory efficiency.
- CIER’s forecast of TWD appreciation to 29.42 per USD suggests limited downside risk and potential for net strength.
- Resilience of Taiwan’s exports provides ongoing support for the currency amid global volatility.
Range
TWD/USD at 0.031856, near its 3-month average, having traded in a stable 1.9% range from 0.031569 to 0.032166.
TWD/EUR at 0.026879, just 0.9% below its 3-month average of 0.027126, with a 4.5% range from 0.026598 to 0.027786.
TWD/GBP at 0.023486, near 14-day highs and 0.7% below its 3-month average of 0.023651, trading in a 6.3% range from 0.023091 to 0.024543.
TWD/JPY at 4.8766, 1.8% below its 3-month average of 4.9641, within a 3.8% range from 4.8549 to 5.0388.
What could change it
- A shift in Taiwan’s inflation trajectory or a deviation in the policy rate path beyond DBS’s forecast could alter the TWD outlook.
- Unexpected changes in Taiwan’s export demand or global tech cycles could impact demand for the currency.
- Changes in global risk sentiment or USD strength could push the TWD higher or lower against major currencies.
- Regulatory or liquidity developments in TWD markets, including swap market dynamics, could affect flows and volatility.
