Taiwan dollar surge ‘a warning shot’ in Asia’s trend towards de-dollarisation: analysts

Amjad Ali May 7, 2025

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Taiwan dollar surge ‘a warning shot’ in Asia’s trend towards de-dollarisation: analysts

The New Taiwan dollar’s sudden surge in recent days, along with the appreciation of other Asian currencies, highlights the prospect of deepening regional de-dollarisation as investors rethink their investments in the US currency amid Washington’s “extremely predatory” behaviour towards foreign countries, analysts said.

Economies like Taiwan, that historically have very high exposure to assets denominated in US dollars, have taken a foreign exchange-led hit after the currency weakened in recent weeks, wrote Francesco Pesole, foreign exchange strategist at Dutch bank ING, in a note on Tuesday.

“Local players are now seeking greater US dollar hedging as well as starting to diversify away from US investments.”

The shift away from US assets will likely contribute to the continued devaluation of US dollars, supporting a “bearish narrative” for the currency, Pesole added.

The New Taiwan dollar’s surge hit a pause on Tuesday, closing at NT$30.280 to US$1 from Monday’s NT$30.145 – ending its jump since April 24. It traded at NT$30.244 as of 2.50pm on Wednesday.

Taiwan’s central bank published a statement on Monday urging manufacturers to remain calm and avoid “dumping US dollars due to irrational expectations based on over-exaggerated or untrue analyses in the market”.

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