I have a question… if… if some countries, like the US or any others or even the World decides to devalue it’s currency, how would this affect the Taiwan NT??
I was thinking that because the NT is not a recognized currency that it’s value would stay the same??
any opinions??
[quote=“sleepingtiger”]I have a question… if… if some countries, like the US or any others or even the World decides to devalue it’s currency, how would this affect the Taiwan NT??
I was thinking that because the NT is not a recognized currency that it’s value would stay the same??
any opinions??[/quote]
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[quote=“sleepingtiger”]I have a question… if… if some countries, like the US or any others or even the World decides to devalue it’s currency, how would this affect the Taiwan NT??
I was thinking that because the NT is not a recognized currency that it’s value would stay the same??
any opinions??[/quote]
what are you talking about? Recognized and unrecognized???
a friend and I were speaking about Taiwan, it’s status, as an unrecognized country, and that the NT dollar
is not a recognized currency. Maybe I’m not explaining properly?? The US dollar is accepted almost everywhere and can
bought at almost any bank. But the NT can not?? So Taiwan’s currency is not recognized…
If you can explain better please do!
I believe the Taiwan govt “loosely” pegs its Taiwan dollar to the US dollar.
With the Central bank stepping in anytime there are large movements.
[quote=“sleepingtiger”]a friend and I were speaking about Taiwan, it’s status, as an unrecognized country, and that the NT dollar
is not a recognized currency. Maybe I’m not explaining properly?? The US dollar is accepted almost everywhere and can
bought at almost any bank. But the NT can not?? So Taiwan’s currency is not recognized…
If you can explain better please do![/quote]
You can freely exchange NT $ against all currencies. It is just not one used for international transactions (Euro/Pound/Dollar), and often some banks do not deal with it as such and will not exchange it as there is no profit for them. You would probably have the same problem with Lithuanian or Malawian currency and probably so for 90% of the worlds currencies.
Have you never exchanged a foreign currency for NT $ or vice versa??
It was explained to me, right or wrong I don’t know, that the NT is only exchanged for the US$. If you are exchanging between any other currency and the NT$, it’s a 3-way exchange using the US$.
On a related note (no pun intended), my British friend who is visiting me for a couple friends had to go to 4 different banks in the Xinyi/101 are to find one that would exchange her GBP.
[quote=“CraigTPE”]It was explained to me, right or wrong I don’t know, that the NT is only exchanged for the US$. If you are exchanging between any other currency and the NT$, it’s a 3-way exchange using the US$.
On a related note (no pun intended), my British friend who is visiting me for a couple friends had to go to 4 different banks in the Xinyi/101 are to find one that would exchange her GBP.[/quote]
'taiwan pretty much thinks in US dollars.
[quote=“CraigTPE”]It was explained to me, right or wrong I don’t know, that the NT is only exchanged for the US$. If you are exchanging between any other currency and the NT$, it’s a 3-way exchange using the US$.
On a related note (no pun intended), my British friend who is visiting me for a couple friends had to go to 4 different banks in the Xinyi/101 are to find one that would exchange her GBP.[/quote]
Mainly because there are strict controls on foreign currency in Taiwan, and only larger, more resilient banks -not just any fly by nights in fancy areas- trade other currencies other than dollars and euros. Mega Bank, Taiwan Bank, etc. that’s the ones you go to.
Most smaller currencies are exchanged directly to the US dolar as most are pegged to it -no gold standard. As a matter of fact, in Central America we use both local and US dollars, due to inflation. Taiwan dollars are a strong currency, getting stronger, and there is no need to fear hyperinflation or any kind of systemic failure that would cause it to lose value. Zimbawbe it is not.
Yes, I believe it’s true that everything works it’s way through the USD first (could be wrong on that but it’s certainly what the tellers have told me many times). Not all the banks carry foreign currency, Icon mentioned some major ones, can also include some other bigger ones like ICBC (the best one I think ) , Huanan, Yushan etc.
As for exchanging outside Taiwan, it is very difficult if impossible in most countries.
Icon is also correct that the NTD is a very strong and reliable currency. It is backed up by some of the largest foreign reserves in the world and a country with relatively little debt and strong manufacturing economy. The main worry with the NTD is that it tends to track USD to remain competitive as an exporter, so you need to watch out for that (just like most Asian currencies), it will still have a limit as to how much it will track down.
The odd thing is: the big banks that do the exchanging are NOT the usual HSBC’s or the Citibanks- they tend to be fairly useless for otc services like this, and retain services for their ‘wealth’ clients… because (frankly speaking) they do not offer a decent service to anyone else… So it’s the local Chinese banks who do the most exchanging for otc services. It’s likely that you may do a 3-way trade in either a small currency or when the bank doesn’t have the means to do it any other way. Stick to the main banks, insist on 2-way exchanges only unless not viable (ie. you’re buying Zimbabwe dollars!).
It’s just the way it is here.
Kenneth
Could you (or anybody) explain what that means in theory and in practice?
(When i buy NT$ and pay with Yen i don’t get a worse rate than if i were to pay with US$, so i don’t understand what “3-way exchange” means.)
If you are buying NT$ with JPY, there are two steps. First you buy US$ with your JPY, then you buy NT$ with those US$. That middle step is transparent, but I’m told that’s what happening.
Sounds like you are thinking of transfers of NT to foreign currency accounts, but that again is just a product of the receiving bank not dealing in anything other than USD. It’s not the case with banks in TW. Many trade in a variety of currencies directly.
I think back to the days when I was using my CAlifornia based AMEX in Taiwan and paying the bill in NT dollars in Taiwan.
Say i went to HK , my expenses would be converted from HK dollars to US dollars and because I paid in Nt dollars, it would then be converted into Nt dollars on payment. Hkd becomes USd becomes Ntd. Losing twice in forex in the process.
I don’t know of any bank that is not able to trade currency pairs directly. I think y’all are confused with EFT intermediaries - many foreign banks will not accept foreign currency payments directly from Taiwanese banks due to fraud concerns, so the Taiwanese banks send transfers through a trusted third party.
The way it was explained to me was that although for all intents and purposes it looks like a direct exchange to the consumer, the rate is calculated via the US$.
Whatever way it is acheievd (and I believe the internal transaction is indeed usually/always through USD even though they do not always explain that way), the important thing is to go to a big commercial bank for the best rate. Airport rates are pretty good too here (as opposed to almost anywhere else in the world, another example of Taiwan’s GOOD VALUE FOR MONEY
TM
culture), as they are branches of the big banks like Taiwan Bank.
If you try to get certain currencies in the branches or switch currencies like Asian currencies back to NTD they will sometimes let you know of this middle USD transaction, so you can decide if you really want to do it that way, they are helpful.
Oh, if that is what you mean: if i am not mistaken the US$ is used in many countries and on an international level as a reference value for all other currencies as well as for gold, silver, crude oil, natural gas, etc. - i don’t take that to mean that an exchange between any two non-US$ currencies involves two transactions rather than one. (But i am not a finance expert, so i am not presenting an argument here, just wondering aloud…)
Could you give me an example of how that would work out if we, say, wanted to buy NT$ and pay for them with Yen (JPY)?
Here is some information about my latest currency exchange in Taiwan:
On Monday afternoon i took 40,000Yen (JPY) to a jeweller’s shop and got 14,400NT$ (NTD) in exchange - that means the rate there was 0.3600. The OANDA currency converter that i use as regular reference tells me that on August 9 (last Tuesday) the official exchange rate between the two currencies was at 0.37069. The bank of Taiwan where i checked for comparison on Tuesday (usually i don’t check because i know the rate differences are small) showed 0.3648 for buying (cash) and 0.3758 for selling (cash). This means, if i had wanted to buy 40,000Yen at the Bank of Taiwan i would have had to pay 15,032NT$, and if i had exchanged my Yen there i would hav received 14,592NT$ - a difference of +1.38% and -1.6%, compared to the official exschange rate. The shop where i bought the NT$ was -2.88%. Compared to Canada where i exchanged money more than once, these are very good rates (a relatively low profit margin for the businesses doing the exchange), and it is hard to see how the US$ comes into this equation at all on the “down to earth” level…
[quote=“tommy525”]I believe the Taiwan govt “loosely” pegs its Taiwan dollar to the US dollar.
With the Central bank stepping in anytime there are large movements.[/quote]
That close relationship is evident from graphs that show historic exchange rates - the rate only moves in a relatively narrow band…
Here are two sites offering such historic data:
exchangerates.org.uk/USD-TWD … story.html - however,
x-rates.com/d/USD/TWD/graph30.html
And another set of sites:
oanda.com/currency/historical-rates/
gocurrency.com/v2/dorate.php … te=Convert
The difference between the first set and the second set is that the second set shows a completely fixed rate during the time period July 31 to August 11 - don’t know yet how those differences in the data come about (daily average vs. what?) - this needs a bit more digging…