TAIPEI (Reuters) – Taiwan will act to stabilise the stock and foreign exchange markets, President Tsai Ing-wen said on Thursday, as markets there tumbled almost 6% on fears about the outbreak of the new coronavirus in China where 170 people have died so far.

China is Taiwan’s largest trading partner, with some 40% of its exports going there, meaning it is vulnerable to any slowdown in the Chinese economy due to the spread of the coronavirus.

Taiwan’s main stock index closed down 5.75%, its lowest in almost three months, on the first day of trade after markets were shut for more than a week during the Lunar New Year holiday.

The Taiwan dollar also weakened as much as 0.8% against the U.S. dollar after markets reopened following the break.

Speaking at a news conference at the presidential office, Tsai signalled that the government was ready to intervene to fend off what she called short-term psychological shocks.

“I have instructed relevant departments to take the following measures in response, the first of which is to stabilise the stock and foreign exchange markets, to reduce the shocks from short-term psychological factors,” she said, without giving details.

The government will also look at helping companies who have been affected, including in the tourism and travel industry, and may consider whether a special budget is needed depending on how the virus situation develops, Tsai added.

Taiwan’s Financial Supervisory Commission said in a statement that market fundamentals and the economy were sound, but that if there were “irrational falls” in the stock market it would take “necessary stabilising steps”. It did not elaborate.

Deputy Finance Minister Frank Juan told Reuters earlier on Thursday that the government was not planning to call a meeting of its National Stabilisation Fund to intervene in the stock market.

“The National Stabilisation Fund can’t just meet, there needs to be certain conditions, including continuous declines in the stock market, a large amount of capital outflows and so on,” he said. “It will only meet if the conditions have been met.”

Juan said market fundamentals were strong, noting the government’s recent upward revision of its outlook for economic growth this year.

“The stock market is a window into the economy, and investors should have confidence in Taiwan’s stock market.”

Responding to a Reuters question on how the Taiwan dollar was faring and whether the government would take any action, a central bank official said its performance was “okay”.

The central bank will keep close watch on fluctuations in the foreign exchange market and will ensure stability if there are unusual movements, said the official, speaking on condition of anonymity.

Analysts at ANZ this week named Taiwan and Vietnam as the two economies most exposed to potential impacts on growth and trade from the virus outbreak.

Taiwan has so far reported nine cases. The government has moved to stop most visitors from China coming to the island, seeking to prevent the spread of the virus.

Taiwan Cabinet spokeswoman Kolas Yotaka told reporters the virus would certainly have an impact on the island’s economy but said market falls were in line with expectations.

Having been through the 2002-2003 SARS crisis in which nearly 800 people died globally, Taiwan is well prepared this time around, she added.

“We call on people not to worry.”

Speaking at the same news conference, National Development Council Deputy Minister Cheng Cheng-mount said Taiwan’s situation was very different from China’s, having reported only a few cases of the virus.

Taiwan has been very prudent about preventing the spread of the virus, Cheng said, adding he did not expect much impact on exports.

Taiwan has predicted stable growth of 2.72% in 2020, citing “positive effects” of factory relocations from China amid the China-U.S. trade war.