The New Taiwan dollar (TWD) is considered to be an exotic currency in the Forex market. Taiwan is the world’s nineteenth largest economy (CIA.gov).
Trade Surplus or a Trade Deficit?
Taiwan runs a trade surplus of $39 billion, giving the country a ranking of 10 out of the 190 countries tracked by the CIA in The World Factbook (CIA.gov).
What Does Your Economy Export?
Taiwan exports electronics, flat panels, machinery, metals, textiles, plastics, chemicals, and optical, photographic, measuring and medical instruments.
Accord to the World Trade Organization (WTO), Taiwan exports $203.7 million in goods and merchandise compared to only $30.6 million in commercial services. The WTO breaks down those exports as follows:
Goods and Merchandise
- Agricultural products: 2.1 percent
- Fuels and mining products: 7.7 percent
- Manufactures: 88.5 percent
Commercial Services
- Transportation: 17.9 percent
- Travel: 22.7 percent
- Other commercial services: 59.4 percent
To Whom Does Your Economy Export?
The WTO ranks the following countries as the top destinations for exports from Taiwan:
- China: 26.6 percent
- Hong Kong: 14.5 percent
- United States: 11.6 percent
- European Union: 10.5 percent
- Japan: 7.1 percent
What Does Your Economy Import?
Taiwan imports electronics, machinery, crude petroleum, precision instruments, organic chemicals, and metals.
According to the WTO, Taiwan imports $174.4 million in goods and merchandise compared to only $29.1 million in commercial services. The WTO breaks down those imports as follows:
Goods and Merchandise
- Agricultural products: 5.9 percent
- Fuels and mining products: 27.9 percent
- Manufactures: 64.5 percent
Commercial Services
- Transportation: 27.1 percent
- Travel: 26.8 percent
- Other commercial services: 46.1 percent
From Whom Does Your Economy Import?
The WTO ranks the following countries as the top sources of imports to Taiwan:
- Japan: 20.8 percent
- China: 14.0 percent
- United States: 10.5 percent
- European Union: 9.0 percent
- Korea: 6.0 percent
Do You Have an Attractive Government Debt Market?
Taiwan currently has a Moody’s rating of Aa3. It received this rating on March 24, 1994. This is the only rating that Taiwan has ever had.
Do You Have an Attractive Equities Market?
Taiwan has an attractive equities market, but it is not very large. It is the twenty-first largest equities market in the world, with a total market value of $354.7 billion (CIA.gov).
Central Bank Mandate
The Central Bank of the Republic of China (Taiwan) states that according to the Central Bank of China Act, the bank’s operational objectives include promoting financial stability, ensuring sound banking operations, maintaining the stable internal and external value of the currency, and, within the scope of the previous three objectives, fostering economic development.
The foreign currency reserves and gold deposit information for Taiwan is not available.
Government Intervention in Forex
The Taiwanese government has been known to intervene in the currency market from time to time.
Important Economic Announcements
When you are watching the economic announcements coming out of Taiwan, make sure that you keep your eye on the following:
- Interest rates
- Employment
- Inflation
- Gross domestic product (GDP)
- Trade balance
Are You a Safe-Haven Currency?
No, the New Taiwan dollar is not considered to be a safe-haven currency.
How Can I Trade You?
You cannot currently trade the New Taiwan dollar, but spot Forex dealers do have plans to offer pairs including the New Taiwan dollar in the future.
