The NT dollar closed at 32.445 per US dollar on 19 October, down 1.07 jiao, after the central bank intervened late in the session.
The currency had weakened again in the afternoon to an intraday low of 32.572, its lowest level since late April of the previous year. According to central bank data, the US Dollar Index rose 0.21% on the day, while the NT dollar fell 0.33% and was the weakest of the major Asian currencies.
EQUITIES SLIDE AS FOREIGN SELLING CONTINUES
Weak US technology stocks on the previous Friday dragged the Taiex lower. The index fell more than 940 points intraday to 46,170 before low-priced buying narrowed the loss, and it closed down 289.18 points at 46,822.08.
Foreign institutional investors were net sellers of Taiwan equities for a ninth consecutive day on 19 October. In the week to 16 October they recorded net sales of US$19.40 billion in Taiwanese shares and net capital outflows of US$17.96 billion from the country.
CENTRAL BANK POINTS TO STABILITY AND TECH RISK
In an intraday statement, the central bank said the NT dollar has remained relatively stable against the US dollar compared with other major currencies over a long period. It said it would intervene as market supply and demand required to maintain a dynamically stable exchange rate.
The bank also described the local stock market as relatively resilient, noting that the Taiex fell 5.4 percent from 7 to 16 October against a 15.7 percent drop in the Philadelphia Semiconductor Index. It said foreign investors have been reducing exposure to Taiwanese equities because of high valuations of AI-related stocks and rising financing risks in the industry.
Investors have been reassessing risks in the AI industry, amid concerns that heavy investment in AI infrastructure may not generate satisfactory returns. The central bank attributed the NT dollar's 1.37 percent decline in the previous week to a global technology stock correction and foreign capital outflows.
ASIAN CURRENCIES AWAIT THE FEDERAL RESERVE
The NT dollar fell NT$0.463 in the week to 16 October, closing at NT$32.338 on Friday, its steepest weekly decline in more than a year. Cathay United said expectations of higher US interest rates have weighed on Asian currencies by pushing up US bond yields.
The pressure comes before the US Federal Reserve's monetary policy review on 27 and 28 October. In the same week the Taiex lost 2,202.18 points, or 4.47 percent, to close at 47,111.26, driven down by large-cap tech stocks amid concern that rising US inflation, fuelled by high crude oil prices, could push the Fed towards a more hawkish stance.
RESERVES AND THE INTERVENTION BACKDROP
Taiwan's foreign exchange reserves stood at $600.8 billion in September 2026, down from $601.9 billion the previous month. The central bank had intervened heavily in the foreign exchange market in the second quarter of 2025.
At that point it faced the risk of designation as a currency manipulator by the US Treasury if cumulative interventions over four quarters exceeded 2% of GDP. In November 2025, the Treasury and the central bank committed to avoiding exchange rate manipulation for an unfair competitive advantage, and agreed that intervention should be reserved for excess volatility and disorderly currency movements.