Taiwan’s foreign exchange reserves reached another milestone at the end of last month, buoyed by increased returns from the central bank’s investment portfolio and fluctuations in non-US dollar currencies, according to the monetary authority on Friday.
The central bank reported that foreign exchange reserves grew by US$496 million to a total of US$573.3 billion, marking the second consecutive monthly increase. This surge was attributed to both portfolio management gains and currency movements against the greenback.
Furthermore, foreign investors’ holdings of Taiwan-listed stocks, bonds, and New Taiwan dollar deposits soared to a record high amid a robust equity market, totaling US$837.1 billion by the end of last month. This amount represented 146 percent of Taiwan’s total foreign exchange reserves, the highest proportion recorded.
The US dollar index, which tracks major currencies against the greenback, rose by 1.14 percent last month. In contrast, the New Taiwan dollar depreciated by 0.21 percent against the US dollar, while the yuan fell by 0.61 percent. The yen, euro, pound, Canadian dollar, and Australian dollar also experienced declines against the US dollar during the same period.
Despite volatility earlier in the year, the New Taiwan dollar showed resilience in recent months, leading the central bank to undertake minimal intervention efforts, noted Tsai Chiung-min, Director-General of the Department of Foreign Exchange.
Taiwan’s stock market surged over eight percent last month, with the TAIEX surpassing the 23,000 point mark, driven by enthusiasm surrounding artificial intelligence technologies. This bullish sentiment contributed to the rise in foreign holdings of Taiwanese assets to record levels.
According to the central bank’s data, Taiwan ranked as the world’s fifth-largest holder of foreign exchange reserves, trailing China, Japan, Switzerland, and India. China, maintaining its position as the largest holder, reported a decrease in reserves to US$3.222 trillion amid ongoing pressure on the yuan from a strengthening US dollar, as reported by the Chinese State Administration of Foreign Exchange.
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