Taiwan Dollar Strengthens Past 30, Insurance Industry Faces Severe Impact
Today (5th), the New Taiwan Dollar continues its upward momentum, surpassing the 30 mark, attracting many retail investors to purchase cheap US dollars and Japanese yen. However, the appreciation of the Taiwan dollar may severely impact the insurance industry. Insurance companies typically hold various assets denominated in USD, and when the dollar weakens, the valuation of these assets in TWD converts to paper losses.
Analysts worry that the insurance sector may struggle to issue dividends. Currency expert Li Qizhan mentioned that as the USD depreciates, exporters might accelerate their selling pressure, impacting the exchange dynamics. Analyst Chen Wujie noted that if the TWD appreciates by 1%, the insurance industry's profit could drop by 5%. The stock market has already reacted quickly to these sentiments, with the stock prices of leading financial holding companies falling significantly, placing the insurance sector in the spotlight.
