The New Taiwan Dollar has risen to its strongest level in nearly three years, causing concerns in the market that a stronger exchange rate will weaken export earnings.

On May 5th, the New Taiwan Dollar briefly surged by 5%, marking the largest intraday gain in over thirty years. The reason for this was speculation in the market that exporters were ahead of exchanging their US dollars for New Taiwan Dollars. The currency of Taiwan continued its upward trend from last Friday, reaching its strongest level in nearly three years. Concerns in the market about a stronger exchange rate potentially weakening export earnings led to a decline in the stock price of Taiwan Semiconductor giant TSMC, reversing the 7% gain from last week. Worries about the deteriorating outlook for the US dollar also prompted Taiwan's major life insurance companies to hedge their US dollar debts, providing additional momentum for the New Taiwan Dollar. The Central Bank of the Taiwan region of China held an emergency press conference on Monday evening in an attempt to calm various speculations in the foreign exchange market. The institution stated that the significant appreciation of the exchange rate over the past two days was partly due to market rumors, and urged against irresponsible speculative behavior. Despite the continuous appreciation of the New Taiwan Dollar, the currency authorities in Taiwan were not found to have actively intervened in the market on Monday to suppress its rise, even though they typically intervene to stabilize fluctuations. Over the past month, the New Taiwan Dollar has accumulated an appreciation of over 10%.