Amid rising concerns over Taiwan's currency strength, President Lai Ching-te has stepped forward to clarify the reasons behind the recent surge of the New Taiwan Dollar (TWD) against the US dollar. In a speech delivered on May 5, 2025, Lai attributed the currency's rapid appreciation to market speculation rather than any agreements related to trade negotiations with the United States.
In the past two days, the TWD has soared by 6.21%, closing at 30.145 TWD per US dollar, marking its strongest position in over two years. This sharp increase has prompted panic among the public, leading many to sell off their US dollars, further influencing the currency's value. Lai expressed regret over the rumors that fueled this sell-off, urging the public to remain calm and confident in Taiwan's economic stability.
According to Focus Taiwan, Lai emphasized that the recent fluctuations in the TWD are not the result of any currency manipulation or political maneuvering. "The rise in the TWD is purely a market-driven phenomenon, and I assure you that currency issues were not on the table during our recent trade discussions with the US," he stated. This assurance comes in light of ongoing negotiations aimed at addressing trade imbalances, where other Asian nations, including Taiwan, are seeking to reduce their trade surpluses with the US.
Market analysts have suggested that expectations of pressure from the US to strengthen the TWD have had a significant impact on the currency's performance. However, Lai remains optimistic, citing Taiwan's robust economic fundamentals as a key driver for the TWD's strength. He pointed to the country's GDP growth rate of 5.37% in the first quarter of 2025, up from 4.59% in 2024, as evidence of Taiwan's economic resilience.
Furthermore, the International Monetary Fund (IMF) recently revised its forecast for Taiwan's GDP growth in 2025 from 2.7% to 2.9%. This positive adjustment contrasts with downgraded forecasts for other emerging economies in the region, such as Hong Kong, South Korea, and Singapore, indicating that Taiwan's economic outlook remains comparatively strong.
Lai called on the people of Taiwan to trust in their economy, asserting that the TWD's exchange rate will reflect their confidence. He acknowledged that while the TWD's appreciation might have varying impacts across different sectors, the underlying cause is the strong demand for Taiwan's high-tech products, including semiconductors and artificial intelligence technologies, rather than any deliberate currency policy.
"Taiwan is at a crucial juncture in its trade situation, and our negotiation team will safeguard national interests without sacrificing any industries," Lai remarked. He also reiterated that Taiwan has never been accused by the US of being a currency manipulator, underscoring that currency issues are not a point of contention in trade talks.
In light of the recent fluctuations and the accompanying public anxiety, Lai's administration is urging citizens to refrain from spreading unfounded rumors that could destabilize the market further. The president's message aims to restore public confidence in Taiwan's economic strategies and the integrity of the TWD.
As the situation develops, the government is committed to ensuring that the interests of the nation and its people are prioritized during ongoing trade negotiations and in the management of the currency. The focus remains on fostering a stable economic environment while addressing the complexities of international trade relations.
Overall, Lai's reassurances come at a time when Taiwan is navigating a delicate balance between maintaining its economic growth and managing its international trade relationships, particularly with a powerful partner like the United States.
