Taiwan dollar rises to 31.267, strongest since December

Taiwan dollar rises to 31.267, strongest since December

Taiwan Dollar Hits 31.267, Strongest Level Since December Amid Trade and Economic Shifts

The Taiwan dollar (TWD) rose to 31.267 per U.S. dollar on February 25, 2026, marking its strongest level since December 2025, driven by resilient tech exports, foreign capital inflows, and evolving trade dynamics. The exchange rate reflects ongoing volatility in the currency, which has fluctuated significantly over the past six months, with a high of 0.0342 USD per TWD on July 14, 2025, and a low of 0.0316 USD per TWD on December 18, 2025 according to exchange rate history.

The appreciation follows a surge in October 2025, when Taiwan's exports hit record highs, fueled by strong demand for semiconductors and other technology products. The island's trade surplus also reached a record level, contributing to upward pressure on the currency. Meanwhile, expectations of Federal Reserve rate cuts and broader dollar weakness have bolstered foreign investment in Taiwanese equities, further supporting the TWD according to trade data.

Taiwan's central bank has maintained a hands-off approach, emphasizing that its interventions aim to manage volatility rather than target specific exchange rates. A joint statement with the U.S. Treasury in late 2025 clarified that neither side sought currency manipulation for trade advantages, dispelling speculation about coordinated efforts to weaken the dollar according to central bank statements. However, the central bank's inaction has raised concerns among exporters, who face shrinking profit margins as the TWD strengthens.

The currency's rise also highlights structural challenges. Taiwan's life insurers, holding $483 billion in foreign assets, have reduced hedging ratios to cut costs, indirectly supporting the dollar and limiting TWD appreciation according to regulatory analysis. Regulators recently allowed insurers to amortize foreign exchange losses over bond lifetimes, a move analysts argue may exacerbate currency volatility.

Looking ahead, the TWD's trajectory will depend on trade negotiations, Fed policy, and the sustainability of Taiwan's economic growth. While the island's economy is projected to expand nearly 6% in 2025, prolonged currency strength could strain export competitiveness, prompting renewed scrutiny of monetary and regulatory policies according to economic projections.

Exchange rate history: TWD to USD exchange rate history (June–December 2025).
Taiwan's trade surplus, tech exports, and central bank statements: Taiwan's trade surplus, tech exports, and central bank statements.
Taiwan's trade surplus, tech exports, and central bank statements: Central bank and U.S. Treasury joint intervention guidelines.
Regulatory changes affecting life insurers' hedging practices: Regulatory changes affecting life insurers' hedging practices.