The Taiwan dollar (TWD) has experienced a notable appreciation of more than 10% against the US dollar (USD) in just a few days, marking the highest rise in more than 30 years, according to Digitimes reports.
This strengthening of the Taiwanese currency raises concerns about the potential increase in electronic products prices in the United Statesgiven the crucial implication of Taiwan in the manufacture of semiconductors and electronic components.
Important companies in the sector, such as TSMC and ASE Technology, maintain profit margins that allow them to deal with exchange fluctuations.
Economic problems? The strength of the Taiwanese currency could affect the US electronic market
Nevertheless, The magnitude of TWD appreciation represents considerable challenges. According to Focus Taiwan, ASE Technology anticipates an impact of approximately 1.5 percentage points on its gross margin for each increase in a TWD dollar against the USD.
The Central bank of Taiwan has intervened in the debate, warning about the influence of speculation on currency assessments. In a press conference, the Bank governor assured that the strengthening of the TWD is due, in part, to expectations grown around recent commercial conversations between Taiwanese and American officials.
With this, Rumors arise that the United States could be pressing Taiwan to manipulate its currency in order to make imported products imported from the Asian country; However, the bank denied such allegations.
Despite the global volatility of the financial market, the Central Bank reaffirms that the Taiwanese economy remains robust. What remains crucial is that both individuals and organizations monitor speculation that could distort the market, since these can generate irrational expectations among investors.
