Overseas investors sold net NT$25.2B of Taiwan shares

Overseas investors sold a net NT$25.2 billion of Taiwanese equities in the latest week, marking one of the largest outflows in recent history. This follows a broader regional trend, with developing Asian markets excluding China experiencing a record NT$110 billion in weekly outflows, the largest since March 2022. Taiwan accounted for the bulk of these withdrawals, reflecting heightened risk aversion amid escalating geopolitical tensions in the Middle East and uncertainty over global energy markets.

The selloff has pressured the Taiwan dollar, which fell to 31.782 per U.S. dollar on March 5—the weakest level since May 2026. Foreign outflows have intensified as investors seek safer assets, with the U.S. dollar benefiting from its status as a haven currency. Analysts note that rising energy prices and delayed Federal Reserve rate cuts could prolong dollar strength, further weighing on emerging market currencies.

The MSCI Asia Pacific Index dropped 6.3% last week, its steepest decline in nearly six years. In Taiwan, the outflows follow a sharp reversal from earlier 2026, when strong inflows driven by AI-related optimism had briefly pushed the Taiwan dollar to its strongest level of the year. Traders report increased intervention by state-owned banks to stabilize the currency, though pressures persist as exporters delay dollar sales.

Derivatives markets now reflect a bearish outlook, with one-month non-deliverable forwards for the U.S. dollar-Taiwan dollar pair trading above 32, the highest since April 2026. The central bank may face renewed calls to act if the currency's decline accelerates toward critical levels.