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Taiwan's REER Index Keeps Dropping in February 2014

2014/03/26 | By Judy Li

The real effective exchange rate (REER) index of Taiwan's currency, the New Taiwan dollar, fell for the fifth consecutive month to 99.37 in February, lower than the corresponding 107.61 of the South Korean won, according to the statistics recently released by the Bank for International Settlement (BIS).

The gap between the REER index of the said two currencies has been increasing since the beginning of this year as NT-dollar has depreciated against the U.S. dollar while the South Korean won appreciated, which works for Taiwan export.

In February the REER index of China's renminbi (RMB) declined to 120.62, ending the third consecutive monthly rise, hence suggesting China's intention to enlarge the fluctuating range of RMB.

To minimize impact from the depreciation of RMB, the central bank in Taiwan has lately reinforced control of the NT-dollar to stabilize the currency. (JL)