Overview
Barclays expects Taiwan dollar (TWD) to remain relatively stable, staying in the 31‑32 per U.S. dollar band for the next several months. This outlook is based on the currency’s performance over the past six months since the onset of the Middle East conflict.
Central Bank Actions
The Central Bank of China (CBC) has carried out two‑way foreign‑exchange interventions during 2026 to smooth the TWD’s trajectory. Barclays notes that the CBC appears comfortable with the current USDTWD range but may intervene to prevent further TWD weakness in order to limit imported inflation pressures.
Economic Context
Taiwan is benefiting from a technology‑sector boom, with record export volumes projected for 2026, which are expanding the current‑account surplus and underpinning the growth outlook. Exporter conversions of USD earnings have not risen, as much of the surplus is being recycled overseas.
Market Dynamics
Foreign equity outflows from Taiwan accelerated in June 2026, and Barclays cautions that future TWD movements will be linked to whether technology stocks continue to post gains.
Insurance Hedge Ratios
Taiwan life‑insurance companies reduced their foreign‑exchange hedge ratios to approximately 44.3 % at the end of April 2026 following regulatory changes and the adoption of IFRS 17 accounting standards. The lower hedge ratios are easing upward pressure on the TWD.
Relative Performance
Since the Middle East conflict began, the TWD has outperformed most Asian peers, and Barclays suggests the central bank may be biased against TWD weakness to manage rising imported‑inflation pressures.