The new Taiwan Dollar made titles this week after that obtained Over 5% of the US dollar before the island's central bank step in What is it curbing held “Excessive” inflow.
NTD changed the most dramatic step this week, but the US dollar strengthened this week against several currency, including the Malaysian district, the Singapore dollar and Indonesia Reaapiaah. Even the Hong Kong Finance Institution, the city's own de facto Central bank, had to recently Sell Hong Kong dollars to maintain the city against PEG US dollar.
For years, some Asian countries grabbed too strong the US dollar, complaining that it helped inflation, making the necessary imports like food and fuel more expensive.
The countries now get what they want – a weakening dollar – but the results seem to be decisively negative for one set of officials: central bankers.
On Monday, the governor of Taiwan's Central Bank said Yang Chin-Long Officials had intervened On the market to curb excessive inflow without giving details. Yang made comments after a steep 9% two -day rise in ntd value compared to the dollar. Also the leader of the central bank denied that currency exchange rates were part of the US trade negotiations
“The volatility of exchange exchange is the Bane of the Central Bankers,” noted Asian consultation director and chief economist Priyanka Kishore. Central bankers must not care about the direction of the currency, but they still want the shifts to be regular.
“Elevated volatility, if it persists for a certain period of time, encourages uncertainty and has financial and real economic consequences,” Kishore said. For example, the rapidly strengthening currency exporters are already damaging, already under tariffs. “The sharp recognition affects their prospects and planning and reduces competitiveness,” Kishore added.
Taiwanese insurance companies have also largely invested in the US, especially in bonds. Insurers may have been somewhat downward against the dollar, Danny Khoo, Singapore, recommended Saxo Bank's sales manager. “If they all try to do it at the same time, this may be the reason why the new Taiwanese dollar hit a little harder than other Asian currencies,” he added.
Some positive
However, a weakening US dollar is still good news for some of the Asian economy, especially for those who have a US dollar debt. The weaker US dollar reduces the debt of these countries. Some developing Asian economies prefer to use relatively lower interest rates by borrowing US dollars, not in local currency.
The weaker dollar can also be good for Asian consumers as it makes imports cheaper.
The US dollar has sunk this year after US President Donald Trump's changes in trade policy. “Trump's very harsh tariff policy does not provide much confidence in the US,” Khoo said. “People are not so confident in the US economy and political landscape.”
After the United States reported to the United Kingdom, the dollar was leaning up in the second part of this week
Asian countries, currently negotiating with the Trump administration, may see a stronger currency as assets. The US President has complained that a strong dollar makes us less competitive and has accused countries such as Japan and Chinese currencies.
This story was originally reflected on Fortune.com
