The Taiwan dollar has fallen to its lowest level against the US dollar in 14 months. This decline is largely attributed to the strengthening US dollar and significant dividend payouts by domestic Taiwanese firms. Companies are projected to distribute over NT$2.5 trillion (approximately $78.5 billion) in cash dividends this year, marking the largest amount ever recorded according to Bloomberg data that dates back to 1990.
Foreign investors receiving these dividends are expected to convert these funds into other currencies, primarily the US dollar, for repatriation. This conversion activity is anticipated to increase near-term volatility in the Taiwan dollar, adding to the downward pressure on its value.
Previously, in late June 2025, the Taiwan dollar had rallied to a three-year high, reaching 29.15 per US dollar. This was driven by foreign equity inflows, broad weakness in the US dollar, easing trade tensions, and exporter sales of the greenback. Some Bloomberg analysts had even predicted the Taiwan dollar would end 2025 at 30.9 per US dollar, suggesting a future depreciation from its 2025 highs.
