Wed, Feb 07, 2018 - Page 12 News List

Forex reserves post record for 10th month in a row

Staff writer, with CNA

An employee at a bank in Taipei yesterday fans a sheaf of new NT$100 bills. New bills are always in demand before the Lunar New Year to put in red envelopes as a gift.

Photo: Lu Kuan-cheng, Taipei Times

The nation’s foreign-exchange reserves at the end of last month posted a new record high for the 10th month in a row, partly on the back of continued fund inflows by foreign institutional investors, the central bank said.

A stronger euro, which is part of the central bank’s portfolio, and an increase in returns on that portfolio also pushed up the amount at the end of last month, the bank said.

Taiwan’s foreign-exchange reserves stood at US$455.72 billion at the end of last month, up US$4.22 billion from the end of last year.

Foreign institutional investors last month had net fund inflows of US$4.499 billion, which helped boost the nation’s foreign-exchange reserves, Department of Foreign Exchange Director-General Harry Yen (顏輝煌) said, citing central bank data.

The central bank’s figure is about US$694 million short of the US$5.193 billion in net fund inflows reported by the Financial Supervisory Commission.

Yen said the commission’s figure included convertible bonds and global depositary receipts issued by Taiwan-based companies, while the central bank only calculated cash inflows.

The increase in net fund inflows last month reflected the strong performance of the local stock market, which saw its weighted index rise 460.93 points, or 4.33 percent, over the month, he said.

As of the end of last month, holdings of Taiwanese stocks, bonds and New Taiwan dollar-denominated deposits by foreign investors were up US$34.5 billion from a month earlier to US$426.1 billion, the highest level in history, the central bank said.

Foreign-held assets were equivalent to about 94 percent of the nation’s foreign reserves, also the highest ever, up from 87 percent at the end of December last year.

The euro last month rose about 4.1 percent against the US dollar, when the US dollar index, which tracks six other major currencies, fell 3.4 percent, Yen said.

The gains posted by the euro pushed Taiwan’s foreign-exchange reserves higher when converted in US dollars in the bank’s portfolio, he said.

The central bank is determined to maintain sufficient foreign-exchange reserves by improving investment returns, a way to guarantee secure financial markets at home even if foreign institutional investors scramble to move funds out of the nation, Yen said.

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