Caught between China on the one side and the U.S. on the other, Taiwan s dollar is in danger of greater losses than any other emerging-market currency in Asia.Strategists see the central bank cutting interest rates to the lowest in the region outside Japan to combat a shrinking economy, just as the Federal Reserve considers tightening monetary policy.

Taiwan s currency has eked out a 1.4 percent gain in 2016, to NT$32.62 per dollar as of 2:32 p.m. Taipei time on Monday, following three straight years of declines.

The forecast losses show the vulnerability of an island which, despite having an economy bigger than Malaysia s or Hong Kong s, is reliant on exports for two thirds of its output.

Overseas assets of Taiwanese insurers rose to NT$11 trillion $337 billion as of March 31, from NT$8.8 trillion a year ago, data from the Financial Supervisory Commission show.

Foreign funds pulled a net $2.7 billion from Taiwan s stock market in May, paring this year s net purchases to $3 billion, as of Friday in Taipei.

Taiwan s exports shrank for a 15th straight month in April, the longest slump on record, with electrical equipment and machinery comprising half of all outbound shipments.The economy has contracted on an annual basis over the last three quarters, the longest slump since 2009.

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