Taiwanese Dollar falls below 32.5 mark amid capital outflows

The New Taiwan Dollar (TWD) has experienced significant depreciation, recently breaking below the 32.5 level against the US Dollar. During intraday trading, the exchange rate hit 32.55, marking a substantial decline.

The Central Bank of the Republic of China (Taiwan) issued a rare press release to address market anxiety, stating that the TWD has remained relatively stable compared to other major currencies over the long term. The bank committed to monitoring capital flows closely and pledged to intervene in the market as necessary to maintain dynamic stability.

This currency volatility coincides with a downturn in the Taiwan stock market. The Central Bank identified massive foreign capital outflows as the primary driver of the pressure. Between October 12 and 16, foreign investors sold approximately $19.4 billion in Taiwanese stocks, resulting in a net outflow of $17.96 billion.

This trend is linked to a broader global correction in technology stocks, driven by concerns over high valuations and financing risks within the AI industry. While the Philadelphia Semiconductor Index saw significant declines in the US, the Central Bank noted that the Taiwan stock market's decline has been relatively more resilient compared to the US tech sector.