Taiwan Dollar Falls 1.25% Against US Dollar in H1 Amid Foreign Stock Outflows and Dividend Payments, Central Bank Says

The Central Bank of Taiwan reported that the New Taiwan dollar depreciated 1.25% against the US dollar over the first half of the year, attributing the move to net outflows from foreign equity holdings and the repatriation of dividend payments. The transmission mechanism runs through the capital account: foreign investors selling Taiwanese shares must convert local currency proceeds into dollars, adding direct selling pressure on the TWD, while dividend remittances to overseas shareholders create a recurring demand for dollars that typically peaks around the payout season. Taiwanese equities and the currency itself are most exposed, given the market's heavy foreign ownership and the outsized weight of export-oriented technology names that attract and then shed global portfolio flows. The US dollar, as the funding and settlement currency, benefits on the other side of these conversions. The next catalyst to watch is the central bank's monthly foreign portfolio flow data and the trajectory of foreign positioning in Taiwan's listed semiconductor stocks, which will indicate whether outflows are persisting beyond the seasonal dividend window.

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