Is the recent surge of the New Taiwan Dollar really a good thing? It not only makes imported goods from the U.S. cheaper and offers more choices for consumers, but it has also caused oil prices to drop! According to Taiwan's CPC Corporation, starting from midnight on the 5th, the prices of gasoline and diesel will decrease by NT$1.1 and NT$1.4 respectively, reaching the lowest level in nearly four years.

For consumers, this seems like great news, but on the other hand, with our export ratio being extremely high at about 60%-70%, the appreciation of the New Taiwan Dollar means losses when converting to US dollars. Experts predict that some businesses may struggle to survive and could be forced to place employees on unpaid leave or even lay them off.

The public comments, "It's a good phenomenon, but it has both good and bad aspects. While imported goods may become cheaper for consumers, we wonder if our exports will experience the opposite impact." For example, in the case of potatoes, if the exchange rate appreciates by 15%, the imported price may drop to NT$22.9 per kilogram, narrowing the price gap with locally produced goods and increasing consumer options.

However, in some cases like imported dairy products, even if costs decrease, prices may not necessarily reflect that reduction. Experts point out, "Because the U.S. has a large-scale production, their products are certainly more competitive, which will definitely impact the development of domestic industries here in Taiwan."

In short, the New Taiwan Dollar cannot endlessly appreciate. For importers, this situation favors procurement, but for exporters, it poses significant pressure. For instance, a $1 million export order, if the exchange rate falls from 33 New Taiwan Dollars per dollar down to 31, the income would decrease from NT$33 million to NT$31 million, resulting in a loss of NT$2 million. Industry operators express that converting US dollars into New Taiwan Dollars may lead to a loss recently, and these uncertainties could cause businesses to stop taking orders or even halt production, forcing employees into unpaid leave or layoffs.

Finance analysts predict that the New Taiwan Dollar's appreciation against the US dollar will fall within a range of 15% to 20%. Based on the exchange rate of NT$32.017 on April 30, it could potentially reach NT$27 to NT$25.

As Taiwan's economy primarily relies on manufacturing, fluctuations in the exchange rate are particularly sensitive for the machinery sector. The machinery union points out that should the New Taiwan Dollar rise to NT$27 against 1 US dollar, it may cause half of the operators to go bankrupt.