Taiwan state banks were said to have sold USD on Monday in order to limit TWD losses

Reported state-bank dollar selling in Taiwan follows a well-worn pattern: when TWD comes under pressure, the state-owned banks act as the central bank's operational arm in the spot market, smoothing moves rather than defending a level. Episodes of this kind have historically capped intraday depreciation without reversing the underlying trend, which is set by the equity outflow cycle, the hedging behaviour of the large life-insurer sector, and the broader dollar backdrop. The distinction worth drawing is between smoothing and resistance: size that fades as flows persist signals the former, while repeated presence at a consistent level would suggest the latter. The observable tells are the daily fixing's deviation from models, any change in the CBC's language on disorderly moves, and whether forward points and NDF spreads start pricing sustained rather than transitory pressure. Follow-ons tend to run through foreign investor positioning in local equities and any shift in insurer hedge ratios, the usual drivers when TWD weakness extends beyond a session.