Taiwan Businesses Show Concern as Local Currency Appreciates

TaiwanPlus News

Taiwan's currency is appreciating at a record rate against the U.S. dollar. While a stronger currency might seem like a good thing, business owners and economists alike are showing concern.

Transcript

00:00Taiwan's currency, the new Taiwan dollar's value, has been growing at a record rate against

00:06the U.S. dollar.

00:08While that might seem like a good thing, here in Taiwan, businesses are not so sure.

00:14Taiwan is an export-driven economy.

00:17That means it sells a lot of goods overseas.

00:21If its currency is cheaper or weaker, then people buying Taiwanese goods with other forms

00:27of money will find those goods less expensive.

00:31For example, if someone wants to buy 100 U.S. dollars worth of merchandise from Taiwan, under

00:37a high exchange rate, say 33 new Taiwan dollars to 1 U.S. dollar, then they can buy 3300 NTD

00:46worth of goods.

00:47But under a lower exchange rate, which is comparatively stronger, say 30 NTD to the greenback, that

00:55same 100 U.S. dollars will only get them 3000 new Taiwan dollars worth of goods, 10% difference

01:02in buying power.

01:04So what good is a powerful new Taiwan dollar if it can't attract buyers?

01:10Not only that, but what happens if your customers only pay you in the depreciating currency?

01:16And that's not to mention the hit that tourism might take if the NTD stays strong.

01:39Potential visitors might not like to pay more to get less due to exchange rates.

01:44But there is one saving grace, imports.

01:48Things that Taiwan buys from overseas like seafood and agricultural products will be cheaper

01:54by comparison.

02:00So there is at least one silver lining.

02:05But the clouds are still gloomy.

02:07Taiwan's economists say that Taiwan's export economy far outweighs its import economy.

02:14And this sudden spike in currency appreciation will have consequences.

02:18Taiwan's GDP has 60% to 70% of companies.

02:22They are suffering from a serious threat.

02:25They are suffering from a serious threat.

02:26They are not bad at all.

02:28They may not be able to get more money.

02:30That even if they are severe, they will have more money.

02:32That will have more money.

02:34The USDT has increased by 1% of the US.

02:37Taiwan's traditional trade can be affected by 0.1% to 0.3% of the US.

02:43It might seem counterintuitive, strange even, that Taiwan thrives more when its currency

02:56is cheaper. But for an export-dependent economy like Taiwan, that's the reality.

03:02A currency that's worth more is actually worth less for many businesses here.

03:08Andy Xue and Leslie Liao for Taiwan Plus.

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