DEFINITION of 'TWD (New Taiwan Dollar)'

The New Taiwan has been the currency in Taiwan since 1949, when it replaced the Old Taiwan dollar. In 2000, the Central Bank of the Republic of China (Taiwan) became the official issuer of the New Taiwan dollar.

BREAKING DOWN 'TWD (New Taiwan Dollar)'

The New Taiwan dollar's ISO 4217 currency code and abbreviation is TWD. TWD is the legal currency for the Republic of China within Taiwan, Pescadores, Kinmnet and Matsu.

New Taiwan Dollar Specifics and History

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.

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.

RELATED TERMS
  1. Taiwan Stock Exchange (TAI) .TW

    The securities trading center in Taiwan. The Taiwan Stock Exchange ...
  2. Morris Chang

    The founder, chairman and CEO of Taiwan Semiconductor Manufacturing ...
  3. China Credit Information Service ...

    One of the chief credit informational agencies in Taiwan. China ...
  4. Taiwan Stock Exchange Corporation ...

    A stock market index comprised of companies traded on the Taiwan ...
  5. Taiwan, Israel, Chile and Korea ...

    An investment theme focusing on four economies that rank between ...
  6. USD (United States Dollar)

    USD is the currency abbreviation for the United States dollar, ...
Related Articles
  1. Investing

    Could the US Profit from Recognizing Taiwan?

    Is Trump's phone call with Tapei a hint that U.S. could change its stance towards Taipei in the times to come?
  2. Insights

    Trump Forms Trade Council, Taps 'Death By China' Author to Head It

    Trump is forming a new White House National Trade Council and he's tapping one of China's most insistent critics to lead it.
  3. Investing

    Top Asia-Pacific ETFs

    A look at some of the popular exchange traded funds providing access to the Asia-Pacific region.
  4. Insights

    Delta to End Flights to Taipei (DAL)

    Delta announced in early January that it would end its flights to Taipei in May. The airline is also planning to fly into Tokyo’s Haneda Airport in favor of Narita Airport.
  5. Investing

    Taiwan Semi Guidance Warns on Slowing iPhone Sales

    Despite a Q4 earnings beat, the world's largest chip contract manufacturer posts weak 2017 guidance.
  6. Insights

    The US Will Remain the World's Reserve Currency

    Learn why the U.S. dollar is not in any danger of losing its reserve currency status and understand how China is pushing the yuan to be a reserve currency.
  7. Trading

    Play Foreign Currencies Against The U.S. Dollar And Win

    Don't panic when the dollar drops. Learn to exploit the greenback's decline and profit from it.
  8. Investing

    5 Popular Asia Pacific ex-Japan ETFs in 2016 (FXI, EWY)

    Read about five of the top Asia-Pacific ETFs designed to exclude Japan's dominant influence, and learn more about the exposure each offers.
  9. Trading

    The U.S. Dollar's Unofficial Status as World Currency

    Discover how and why the U.S. dollar emerged as official currency in many foreign countries.
  10. Trading

    Why China's Currency Tangos With The USD

    Investopedia explains: It takes two to tango, but unless both partners move in perfect cohesion, a sequence of graceful maneuvers can be reduced to a series of clumsy moves. The latter depiction ...
RELATED FAQS
  1. What is a common strategy traders implement when using the Price Rate Of Change (ROC)?

    Learn a straightforward trading strategy for trend following commonly used by traders implementing the price rate of change ... Read Answer >>
  2. How can I trade in cross currency pairs if my forex account is denominated in U.S. ...

    The forex market allows individuals to trade on nearly all of the currencies in the world. However, most of the trading is ... Read Answer >>
  3. How are international exchange rates set?

    Knowing the value of your home currency in relation to different foreign currencies helps investors to analyze investments ... Read Answer >>
  4. Why isn't the U.S. dollar worth more than the British pound?

    When one country's currency is worth more than another, it does not necessarily indicate a stronger economy. Here's why. Read Answer >>
Hot Definitions
  1. Internal Rate of Return - IRR

    Internal Rate of Return (IRR) is a metric used in capital budgeting to estimate the profitability of potential investments.
  2. Limit Order

    An order placed with a brokerage to buy or sell a set number of shares at a specified price or better.
  3. Current Ratio

    The current ratio is a liquidity ratio that measures a company's ability to pay short-term and long-term obligations.
  4. Return on Investment (ROI)

    Return on Investment (ROI) is a performance measure used to evaluate the efficiency of an investment or compare the efficiency ...
  5. Interest Coverage Ratio

    The interest coverage ratio is a debt ratio and profitability ratio used to determine how easily a company can pay interest ...
  6. Cash Conversion Cycle - CCC

    Cash conversion cycle (CCC) is a metric that expresses the length of time, in days, that it takes for a company to convert ...
Trading Center