The recent appreciation of the Taiwanese dollar has raised significant concerns among exporters and the insurance sector, as the currency's value has surged to 30.77 TWD against the US dollar, a peak not seen in 16 months. This increase, which saw the currency close at 31.064 TWD, has left exporters facing immediate losses, particularly those who had placed orders several months ago when the exchange rate was approximately 32 TWD.
According to reports, the export sector is on high alert as the strengthened currency poses a direct threat to their profitability. Swee Swee Sing, a manager at a machinery company, noted that the current orders mostly stemmed from contracts signed three to four months prior. "We are seeing impacts on revenue that could exceed 10% due to this fluctuation," he stated.
Moreover, the upcoming US Treasury report on exchange rates is generating anxiety as it may categorize Taiwan as a currency manipulator once again. This concern is compounded by fears that the US might intervene in currency markets, creating further volatility. Experts suggest that if the US Federal Reserve opts not to lower interest rates, there could be a temporary halt to the Taiwanese dollar's rise, providing some relief to exporters.
In the broader context, the appreciation of the Thai baht has similarly affected exporters in Thailand, with the currency reaching an exchange rate of 2 TWD per Thai Baht. The Board of Investment (BOI) has warned of the potential adverse impacts stemming from this strong baht, especially as the Thai government has implemented measures to stabilize the economy amid these fluctuations.
"We are advising businesses to revise their currency exchange strategies to mitigate risks associated with the strong baht," said a BOI representative. The Thai government has introduced three measures—tax cuts, water management, and upgrades to internet infrastructure—to bolster confidence among businesses in the industrial sector.
As of May 5, 2025, the Thai government has been enforcing these measures for 90 days, which has led to increased costs for products and services. The BOI has acknowledged that while the upgrades to internet infrastructure are necessary for long-term stability, they may lead to short-term price increases.
In a related development, the Thai government has also been tackling issues related to telecommunications in border areas, particularly in Sangkhla Buri, where a crackdown on illegal businesses has disrupted services. Local residents have expressed frustration over the lack of internet and phone services, which has severely impacted their ability to conduct business.
Wanida Kanthawong, a coffee shop owner in the area, highlighted the challenges faced by local businesses. "Previously, we had reliable internet, but now we struggle to process transactions, especially with tourists who prefer cashless payments. We’ve had to install home internet to keep our business afloat, which adds to our expenses," she explained.
Meanwhile, in the agricultural sector, a recent ban by Laotian authorities on the import of cattle and other livestock due to anthrax concerns has affected traders and transporters dealing in livestock exports. The abrupt policy shift has raised alarms among exporters who are now grappling with the fallout from this decision.
In the solar energy sector, the Thai government is facing challenges from new tariffs imposed by the US. According to a report by SCB EIC, Thailand's solar cell exports have seen a dramatic increase, growing 47-fold from 2015 to 2023. However, new tariffs of up to 972% threaten to decimate this growth, with industry experts warning that exports could shrink to near zero by 2026.
Phichai Naripthaphan, a senior advisor to the Minister of Commerce, has been in discussions with Seagate, a leading global data storage company, about the implications of these tariffs on Thai exports. He urged the company to communicate these concerns to US authorities to maintain a favorable trading environment.
As the situation evolves, exporters across sectors are left to navigate a complex landscape of fluctuating currencies and shifting trade policies. The Thai government is under pressure to address these issues effectively to safeguard the interests of its exporters and maintain economic stability.
Overall, the interplay between currency fluctuations and government policies is creating a challenging environment for businesses in both Taiwan and Thailand. As exporters adapt to these changes, the focus remains on finding strategies to mitigate risks and sustain growth in an increasingly uncertain global market.
