The nation’s foreign-exchange reserves hit a fresh high last month, the central bank reported yesterday.
The reserves reached US$478.13 billion, an increase of US$4.08 billion from the previous month, due to the appreciation of the euro and other reserve currencies against the US dollar, as well as returns from the bank’s management of foreign-exchange reserves, the bank said in a statement.
The reserves increased also because the bank intervened in the local foreign-exchange market to maintain market order, at a time when large and sudden capital inflows caused excessive volatility, it said.
Meanwhile, the value of securities investment and the New Taiwan dollar-denominated deposits held by foreign institutional investors reached US$455 billion at the end of last month, equivalent to 95 percent of foreign-exchange reserves, the bank said.
That represents an increase of US$31.1 billion from the end of November, when it accounted for 88 percent of the foreign-exchange reserves, bank data showed.
The bank attributed the increase mainly to rising foreign fund inflows into local equities, the Central News Agency quoted Department of Foreign Exchange Director-General Harry Yen (顏輝煌) as saying yesterday.
The TAIEX, which climbed 4.42 percent last month thanks to net buying by foreign investors, ended 1.3 percent lower yesterday due to geopolitical tensions in the Middle East, with foreign institutional investors selling a net NT$9.75 billion (US$323.81 million) in local shares on the main bourse, Taiwan Stock Exchange data showed.
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
‘SHORT TERM’: The local currency would likely remain strong in the near term, driven by anticipated US trade pressure, capital inflows and expectations of a US Fed rate cut The US dollar is expected to fall below NT$30 in the near term, as traders anticipate increased pressure from Washington for Taiwan to allow the New Taiwan dollar to appreciate, Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said. Following a sharp drop in the greenback against the NT dollar on Friday, Lin told the Central News Agency that the local currency is likely to remain strong in the short term, driven in part by market psychology surrounding anticipated US policy pressure. On Friday, the US dollar fell NT$0.953, or 3.07 percent, closing at NT$31.064 — its lowest level since Jan.
The New Taiwan dollar and Taiwanese stocks surged on signs that trade tensions between the world’s top two economies might start easing and as US tech earnings boosted the outlook of the nation’s semiconductor exports. The NT dollar strengthened as much as 3.8 percent versus the US dollar to 30.815, the biggest intraday gain since January 2011, closing at NT$31.064. The benchmark TAIEX jumped 2.73 percent to outperform the region’s equity gauges. Outlook for global trade improved after China said it is assessing possible trade talks with the US, providing a boost for the nation’s currency and shares. As the NT dollar
PRESSURE EXPECTED: The appreciation of the NT dollar reflected expectations that Washington would press Taiwan to boost its currency against the US dollar, dealers said Taiwan’s export-oriented semiconductor and auto part manufacturers are expecting their margins to be affected by large foreign exchange losses as the New Taiwan dollar continued to appreciate sharply against the US dollar yesterday. Among major semiconductor manufacturers, ASE Technology Holding Co (日月光), the world’s largest integrated circuit (IC) packaging and testing services provider, said that whenever the NT dollar rises NT$1 against the greenback, its gross margin is cut by about 1.5 percent. The NT dollar traded as strong as NT$29.59 per US dollar before trimming gains to close NT$0.919, or 2.96 percent, higher at NT$30.145 yesterday in Taipei trading
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