Commerzbank analysts note Taiwan’s September trade surplus hit a record USD23.6bn, with exports surging 60.9% year-on-year on strong AI-related demand. The Central Bank of the Republic of China may lean more hawkish if inflation’s uptrend persists. USD/TWD rose 0.3% to 31.90, but the pair’s upside may be limited as the central bank disclosed FX intervention in September.

Record surplus and CBC intervention

“September trade surplus surprised on the upside, widening to a record USD23.6bn (Bloomberg consensus: USD19.0bn) vs USD22.3bn in August. As a result, the surplus from January to September rose 61.9% yoy to USD160.6bn, which has already exceeded the full-year 2025 surplus of USD157.1bn.”

“Overall, the stronger-than-expected trade surplus should reinforce the Central Bank of the Republic of China’s (CBC) confidence in Taiwan’s growth outlook. This could see them place a greater emphasis on inflation at the next meeting on 17 December meeting. Inflation averaged 1.9% between January and September but they picked up to 2.7% yoy in September.”

“In FX, USD/TWD rose 0.3% to 31.90 yesterday, driven by broad USD strength, higher oil prices, and foreign portfolio outflows. Foreign investors were net sellers of USD2.6bn of Taiwanese equities, the largest daily outflow in nearly a month.”

“USD/TWD has consolidated within the 31.65-31.95 range over the past month. Further upside to the pair may be capped by CBC intervention. The central bank disclosed that it intervened in September and may have sold up to USD1.1bn in the FX market.”