New Taiwan dollar

The New Taiwan Dollar (新臺幣 or 新台幣; ISO 4217 code TWD; common abbreviation NT$), or simply Taiwan Dollar, is the currency of the Republic of China (on Taiwan). It is issued by the Central Bank of China.

Overview

The denominations of the Taiwan Dollar in circulation are

• Coins
  • 0.5 TWD (rare)
  • 1 TWD
  • 5 TWD
  • 10 TWD
  • 20 TWD (rare)
  • 50 TWD
• Banknotes
  • 100 TWD
  • 200 TWD
  • 500 TWD
  • 1000 TWD
  • 2000 TWD

Coins are minted by the Central Mint of China, while notes are printed by the China Engraving and Printing Works. Both are run by the Central Bank of China.

In Mandarin, the basic unit of the Taiwan Dollar is called a yuan (圓 lit. round, simplified to 元); colloquially, it is called kuài (塊 lit. piece). Subdivisions of a yuan are rarely used, since practically all products on the consumer market are being sold at whole units of yuan. In Taiwanese, the unit is called kho·.

History of currency in Taiwan

Taiwan was mostly populated by Taiwanese aborigines until the 1600s, when major Chinese settlement began. From 1624 to 1662, Taiwan was colonized by the Dutch East India Company. Not much is known about the currency used then.

Taiwan was first annexed by the Qing Dynasty in 1683 as a prefecture of Fujian province. During this time, Chinese Taels (CNT) was used as the currency. In 1895, when China ceded Taiwan to Japan in the Treaty of Shimonoseki, the Japanese issued Taiwan Yen (TWY) banknotes through the Bank of Taiwan, which was established in 1889, at par with the Japanese Yen. The yen was divisible into 100 sen.

In 1945, after Japan was defeated World War II, Taiwan was returned to China, at the time ruled by the government of the Republic of China (ROC). Within a year, the ROC government took over the Bank of Taiwan and issued Taiwan Dollars (also known as Taiwan Nationalist Yuan or TWN), replacing the Japanese Taiwan Yen at an exchange rate of one to one. The new banknotes were printed in New York at the government's order, and were shipped to Taipei by way of Shanghai. The Taiwan Nationalist Yuan was independent from the Chinese Nationalist Yuan used on Mainland China, since it had been tied to the yen and therefore had depreciated at a slower rate than the Nationalist Yuan.

Partly due to the corruption of the Governor-General of Taiwan, Chen Yi, and the 228 Incident, Taiwan suffered severe inflation in the late 1940s. There are also reports that the Bank of Taiwan under ROC administration did not actually have keep accurate records of the total issuance, and that it printed more notes than was legally allowed [1] (http://www.romanization.com/books/formosabetrayed/chap06.html). As inflation worsened, the government issued banknotes at higher and higher denominations, up to one million yuan, to handle the inflation on the island.

The New Taiwan Dollar was first issued in June 15, 1949 to replace the old Taiwan Nationalist Yuan at a 40,000-to-1 ratio. The first goal of the New Taiwan Dollar was to end the hyperinflation which had plagued Taiwan and Mainland China. A few months later, the ROC government was defeated by the Chinese communists and retreated to Taiwan.

Even though the Taiwan dollar was the de facto currency of Taiwan, for years the old Chinese Nationalist Yuan was still the official national currency of the Republic of China. The Chinese Nationalist Yuan was also known as the fiat currency (法幣) or the silver yuan (銀元), even though it was decoupled from the value of silver during World War II. Many older statutes in ROC law have fines and fees denominated in this currency.

According to the Regulation of exchange rate between New Taiwan Dollars and the fiat currency in the ROC laws (現行法規所定貨幣單位折算新台幣條例) [2] (http://wikisource.org/wiki/%E4%B8%AD%E8%8F%AF%E6%B0%91%E5%9C%8B%E7%8F%BE%E8%A1%8C%E6%B3%95%E8%A6%8F%E6%89%80%E5%AE%9A%E8%B2%A8%E5%B9%A3%E5%96%AE%E4%BD%8D%E6%8A%98%E7%AE%97%E6%96%B0%E8%87%BA%E5%B9%A3%E6%A2%9D%E4%BE%8B), the exchange rate is fixed at 3 TWD per 1 silver yuan and has never been changed despite decades of inflation. Despite the silver yuan being the primary legal tender currency, it was impossible to buy, sell, or use it, so it effectively did not exist to the public.

In July 2000, the New Taiwan Dollar became the official currency of the ROC and is no longer secondary to the silver yuan. At the same time, the Central Bank of China began issuing New Taiwan Dollar banknotes directly.

In the history of the currency the exchange rate as compared to the United States Dollar (USD) has varied from over 40 TWD per 1 USD in the 1960s to about 25 TWD per 1 USD around 1992. The exchange rate has been around 33 TWD per 1 USD in recent years.

See also

• Tael
• Yen
• Yuan
• History of Taiwan
• History of the Republic of China

External links

• Currency Issuance — Central Bank of China (http://www.cbc.gov.tw/EngHome/issue.asp)
• Sinobanknote (http://www.sinobanknote.com/)
• Virginia Sheng, "Notes from a Small Island" (http://publish.gio.gov.tw/PSUser/psrecord.htm?NS_doc_offset=1&NS_doc_returned=2&NS_adv_search=1&NS_search_set=vkaa0aq0a7c5cf28090d8fe&NS_template_dir=&NS_initial_frm=1), Taipei Review, September 1, 2000
• Chuang Chi-ting, "Legislator pans new bank notes" (http://www.taipeitimes.com/News/local/archives/2001/02/17/74035), Taipei Times, February 17, 2001
• History of Taiwan currency (http://www.globalfindata.com/frameset.php3?location=/gh/325.html)

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