DEFINITION of 'TWD (Taiwan Dollar)'
TWD is the ISO 4217 currency code and official abbreviation for the New Taiwan dollar, the legal currency for the Republic of China within Taiwan, Pescadores, Kinmnet and Matsu. It is made up of 10 jiao or further subdivided into 100 cents or fen. NT$ is the internationally recognized symbol for the New Taiwan dollar.
BREAKING DOWN 'TWD (Taiwan Dollar)'
The Qing dynasty of China effectively colonized and gained control of Taiwan between the late 1600s and the end of the 19th century, during which time, the Japanese repeatedly attempted to seize control of the island. When China ceded the island to Japan to end the first Sino-Japanese War in 1896, the Taiwan yen became the official currency of Taiwan. With the end of World War II and the defeat of the Japanese Empire in 1945, China regained control of Taiwan. The Republic of China (ROC) directed the Bank of Taiwan to begin issuing old Taiwan dollars as the official currency to replace the Japanese-backed yen at a ratio of 1 to 1.
The Chinese Civil War between Nationalist and Communist forces, which had paused during World War II, soon rekindled and resulted in the Nationalists being driven from the mainland. The ROC, under the leadership of Chiang Kai-shek, had moved all of China’s gold reserves to Taiwan before fleeing the mainland and establishing the government in Taipei. During the struggle, the Chinese yuan and the Taiwan dollar both experienced a period of hyperinflation. In order to establish credibility for the ROC government and encourage economic development, the Bank of Taiwan began issuing New Taiwan dollars in 1949 to replace the old Taiwan dollar at a ratio of NT$1 to 40,000 old dollars.
Despite being declared the official currency of Taiwan, the New Taiwan dollar was seldom used, and Taiwan had no currency of its own for several decades. A series of temporary emergency provisions in response to the Communist takeover of the mainland made the silver yuan the legal currency of Taiwan for many years. In 2000, the Central Bank of the Republic of China in Taiwan replaced the Bank of Taiwan as the issuer of the New Taiwan dollar, and it became the official currency of Taiwan. Bank notes that were issued by the Bank of Taiwan were gradually removed from circulation.
New Taiwan Dollar Denominations
The ISO 8859 standard symbol for the New Taiwan dollar is NT$. It is available in denominations of NT$1, NT$5, NT$10 and NT$50 in coin form. Denominations of NT$½ and NT$20 were minted but are rarely used. As paper currency, the dollar is available in NT$100, NT$500, and NT$1,000 denominations, with NT$200 and NT$2,000 denominations printed but rarely used. The dollar is technically divisible into subunits of 100 fen or 10 ji_o, but nearly all transactions are in whole dollar amounts.