Taiwan’s foreign exchange reserves last month rose by US$466 million to a record US$548.87 billion, as exporters offloaded US dollars and local investors raised stakes in US dollar-based assets ahead of anticipated interest rate hikes, the central bank said yesterday.
The nation’s foreign exchange reserve rose for the sixth consecutive month thanks to robust demand from companies and organizations around the world for Taiwan-made electronics needed to drive digital transformation, Department of Foreign Exchange Director-General Eugene Tsai (蔡炯民) said.
Strong exports explain why the New Taiwan dollar appreciated in the past two years, Tsai said, adding that US Federal Reserve’s money-printing program has weighed on the US dollar.
Photo: Tyrone Siu, Reuters
Taiwan’s central bank asked exporters before the Lunar New Year to sell their US dollar possessions at different times to avoid a spike in the local currency’s valuation, Tsai said.
Profitable Taiwanese companies normally distribute year-end bonuses prior to the Lunar New Year, putting appreciation pressure on the NT dollar.
Tsai said the central bank has made the plea throughout the year.
The latest gain in foreign reserves was also linked to the central bank’s management skills, the official said, after the euro softened 1.62 percent, the British pound shed 0.67 percent, the Japanese yen lost 0.27 percent and the Chinese yuan gained 0.13 percent.
“In all, the foreign exchange market saw largely balanced supply and demand,” Tsai said.
Local investors have begun displaying more interest in US dollar-denominated assets after the Fed and other major central banks turned hawkish, Tsai said.
Such movements gain momentum when 10-year US Treasury yields rise above 1.75 percent, he added.
The yield is approaching 2 percent after the Fed last month indicated plans to raise interest rates by 25 basis points next month at the earliest to battle inflation.
Global fund realignments accounted for bond and stock market corrections last month, with wild volatility likely to persist for a short while, Tsai said.
Taiwan last month registered US$1.83 billion of net capital outflows, after foreign portfolio managers remitted US$3.24 billion to Taiwan, but transferred US$5.06 billion of gains abroad, Tsai said.
Local shares, debt and local currency deposits held by foreign players totaled US$735.7 billion, or 134 percent of foreign exchange reserves, he said, adding that the ratio is acceptable.
Taiwan remains the world’s fifth-largest foreign exchange holder after China, Japan, Switzerland and India, the central bank said.
Semiconductor stocks on Friday took a beating after a grim profit warning from Idaho-based Micron Technology Inc sparked fresh worries about the US’ earnings power as the country is potentially heading for a recession. Despite a broader stock market rally, the Philadelphia Stock Exchange Semiconductor Index dropped 3.8 percent after Micron, the largest maker of memory semiconductors in the US, flagged that demand was cooling for chips used in computers and smartphones. The index — which is home to US chip giants Advanced Micro Devices Inc and Nvidia Corp, as well as Micron — is down 38 percent this year. Historically, semiconductor
WHOLLY OWNED SUBSIDIARY: Costco Wholesale said it expected the purchase of the remaining 45 percent stake to add 1 to 1.5 percent to its earnings per share US-based Costco Wholesale Corp on Thursday said that it had purchased the remaining 45 percent stake in Costco President Taiwan Inc (台灣好市多) for US$1.05 billion, making the local company a fully-owned unit. “We estimate that the purchase would add about 1 to 1.5 percent to [our] earnings per share,” Costco said in a statement. Costco President Taiwan was established as a joint venture with Kaohsiung-based President Group (大統集團), which held a 45 percent stake. Since the first Costco store opened in Kaohsiung in 1997, 14 outlets have been set up in Taiwan, company data showed. PROFITABLE Three Costco stores in Taiwan — in Taipei’s Neihu
SOARING PROFITS: Semiconductors and shipping have knocked automaking and construction out of the 10 highest paying industries, stock exchange data showed Mobile phone chip designer MediaTek Inc (聯發科) posted an average of NT$5.15 million (US$173,249) in annual compensation for non-managerial employees last year, marking the highest among all firms listed on the Taiwan Stock Exchange (TWSE), exchange data showed. That is a 66 percent increase from the company’s average compensation of NT$3.08 million in 2020, as its earnings per share (EPS) expanded from NT$26.01 in 2020 to NT$70.56 last year. That is also three times higher than the average compensation of NT$1.7 million in the nation’s semiconductor industry, the data showed. The increases helped MediaTek advance its ranking from third in 2020, replacing
EXPANSION: The airline will offer two flights per week to Milan from Oct. 25, and four flights per week to Munich from Nov. 3 using its Boeing 777-300ER aircraft EVA Airways Corp (長榮航空) yesterday announced that it would begin nonstop flights from Taoyuan to Milan and Munich later this year, marking its first expansion in the European market in 25 years. Starting on Oct. 25, the airline will operate two flights per week between Taoyuan and Milan, implementing a plan that was scheduled for February 2020, but was suspended due to the COVID-19 pandemic and the consequent lockdowns across the world. The airline will also launch four weekly flights to Munich, Germany, on Nov. 3, it said. The schedules for the two flights will cater to in-transit passengers, as they will arrive
RSS