Taiwan’s foreign exchange reserves last month rose to a new high of US$543.58 billion as local shares received support from global hot money, after the US Federal Reserve sent dovish messages following its annual economic policy symposium, the central bank said yesterday.
The latest balance suggested an increase of US$502 million, even though foreign portfolio managers wired US$3.48 billion of cash dividends abroad, Department of Foreign Exchange Director-General Eugene Tsai (蔡炯民) told an online news conference.
“The foreign exchange market saw roughly balanced supply and demand for the local currency and US dollar,” Tsai said, declining to comment on alleged central bank interventions.
Photo courtesy of Hua Nan Commercial Bank
The New Taiwan dollar rose to NT$27.502 intersession yesterday, but closed at NT$27.663 in Taipei trading, with turnover of US$1.69 billion, the central bank’s Web site showed.
Foreign stock players raised stakes in local semiconductor firms toward the end of August after the Fed reiterated it would not hike policy rates until after next year, and that it would consider easing bond purchases later this year.
Before the speech, the US dollar strengthened against most currencies as global investors were worried that mounting inflationary pressures would prompt the Fed to change its stance ahead of schedule.
Tsai said the coming “taper” move would lend support to US bonds and affect other financial assets as seen in the past.
Once the US Fed tapers bond purchases, the US dollar is expected to gain force as global investors re-evaluate financial asset prices, Tsai said, adding that much uncertainty lingers due to the rapid worldwide spread of the Delta variant of SARS-CoV-2.
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