On March 20, 2025, at a press conference following the Central Bank's board of directors meeting, Governor Yang Jinlong addressed ongoing concerns regarding foreign investment dynamics and the recent fluctuations of the New Taiwan dollar (NTD). The NTD has fallen below NT$33 against the US dollar, causing market speculation about the stability of Taiwan's currency.
Yang noted, "While we will monitor the stock market closely, we cannot assess specific buying points for stocks like TSMC. It feels inappropriate for the Central Bank to make strong recommendations on individual stocks," implying a cautious approach to commenting on TSMC's stock price.
At the core of the discussion was the apprehension surrounding Taiwan Semiconductor Manufacturing Company (TSMC) and its substantial investments in the United States. Governor Yang acknowledged the 'concern' from foreign investors over TSMC's plans to invest billions in the US, which has led to significant selling of electronics stocks and associated capital flight from Taiwan.
"Foreign investors appear to be diversifying their portfolios amidst this wider context, leading to temporary capital outflows. However, I believe the fundamentals of the Taiwanese stock market are still strong," Yang asserted, adding that TSMC maintains its primary production line in Taiwan, which is crucial for investor confidence.
Yang emphasized that TSMC's market value, which jumped significantly in 2024, prompts investors to take profits. "They are using this opportunity to consolidate gains from the rise in electronics stocks and TSMC's value," he explained. He added that despite the NTD's depreciation, the stability of Taiwan's currency remains comparatively high among global currencies.
The governor reassured the public that the Central Bank has mechanisms to intervene in the foreign currency market should fluctuations become too extreme. "Our position is that the NTD's exchange rate is largely determined by market forces, and we will act to mitigate excessive volatility if required," he stated.
Furthermore, Yang discussed broader economic metrics, revealing a stable Consumer Price Index (CPI). "Inflation remains under control even as we anticipate a slight uptick due to utility price changes," he noted. The projections indicate inflation would hover around 2.04%, slightly lower than 2023's figures, despite recent adjustments in energy tariffs.
In light of the uncertainty surrounding the global economy—especially with US trade policies under President Trump's administration—Yang focused on maintaining positive relations. "Taiwan's requirement for a strong semiconductor industry works in tandem with the US markets' demands for our chips and AI servers, creating a mutually beneficial dynamic," he remarked.
In terms of housing markets, Yang acknowledged recent cooling trends. "We are keen to avoid overheating in the property sector while ensuring it does not crash, which could destabilize finances further," he commented. The targeted mortgage concentration—currently at 37.1%—indicates banks' cautious lending practices in real estate, suggesting that the Central Bank may keep selective credit controls in place until the market stabilizes.
As for concerns about the immediate future, Governor Yang suggested that while foreign investors' concerns about TSMC's US investments are valid, the long-term outlook remains optimistic. "The fundamentals of Taiwan's economy are still strong. The NTD's position over the years illustrates its resilience—even amidst recent volatility," he assured. He reiterated that critical variables affecting future stability, including trade policies and internal economic health, will guide the Central Bank’s policies moving forward.
As always, the Central Bank will remain vigilant about both local and global economic developments, prioritizing market stability, sustainable growth, and manageable inflation levels as it navigates through these uncertain times.
