Mon, Dec 06, 2004 - Page 10 News List

Bank denies plan to cut US dollar assets

BLOOMBERG

Taiwan, which has the world's third-largest foreign-exchange reserves, denied a report that it plans to reduce US dollar-denominated holdings because of declines in the greenback.

The Chinese-language Liberty Times reported on Saturday that Taiwan may pare US assets. The US dollar dropped to a record US$1.3460 against the euro on Friday, according to EBS, an electronic currency-trading system. Taiwan held US$57.4 billion in US Treasuries as of Sept. 30.

The central bank "categorically denies" the report, according to a statement issued on the bank's Web site. No one at the bank "has publicly or privately made such a statement."

The denial comes amid speculation some Asian nations may pare US dollar assets to protect the value of their foreign reserves.

"There's the possibility we may trim our dollar position," Aslim Tadjuddin, deputy central bank governor, said in an interview in Jakarta on Nov. 26. "We will monitor and see what happens to the dollar."

A report on the same day that China, the second-biggest holder of US Treasuries after Japan, trimmed its holdings sent US Treasury notes lower.

The NT dollar fell 0.3 percent last week against its US counterpart, after gaining 5.6 percent in the previous nine weeks. Taiwan's reserves rose last month for a 41st straight month to a record US$239 billion.

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