Taiwan’s foreign exchange reserves last month fell by US$1.06 billion to US$569.54 billion from the previous month, ending two straight months of sequential gains, as the US dollar rose and eroded the value of other reserve currencies, the central bank said yesterday.
In addition, the central bank intervened in the local market last month to shore up the local currency, which weighed on overall foreign exchange reserves, Department of Foreign Exchange Director-General Eugene Tsai (蔡炯民) said during a news conference in Taipei.
It is not uncommon for the central bank to step in when it sees it necessary to slow excessive fund flows and stabilize the foreign exchange market, Tsai said.
Photo: Reuters
Global funds late last month bought greenback-denominated assets on the expectation that the US Federal Reserve would keep interest rates at high levels, rather than start to lower interest rates as early as next month, Tsai said.
As a result, the US dollar index grew 1.94 percent, while the Japanese yen lost 4.23 percent, the Chinese yuan weakened 1.24 percent and the New Taiwan dollar softened 1.64 percent, he said.
The market is now looking at the Fed’s interest rate cuts beginning in May at the earliest, Tsai said.
The view gained force after recent US GDP and employment data turned out stronger than expected and Fed Chairman Jerome Powell last week called for patience with high interest rates following a rate-setting Federal Open Market Committee meeting, he said.
Though the Financial Supervisory Commission saw fund inflows of more than US$3 billion to the local bourse last month, marking the third consecutive month of net fund inflows, the central bank observed foreign funds wiring profits of a similar size abroad, suggesting a balance in supply and demand, Tsai said.
Tsai linked the foreign fund outflow to a cash dividend distribution on the part of Taiwan Semiconductor Manufacturing Co (台積電), the world’s largest contract chipmaker.
Foreign portfolio managers repeatedly cut and raised holdings in local shares last month and so far this month, in keeping with their ever-changing views on the Fed’s policy intentions, he said.
Despite the retreat in foreign exchange reserves last month, Taiwan holds the world’s fourth-largest foreign exchange reserves after China, Japan and Switzerland, Tsai said.
The central bank would maintain ample foreign exchange reserves to ensure stability in local financial markets and guard against any sudden fund outflows by foreign investors, he added.
Vincent Wei led fellow Singaporean farmers around an empty Malaysian plot, laying out plans for a greenhouse and rows of leafy vegetables. What he pitched was not just space for crops, but a lifeline for growers struggling to make ends meet in a city-state with high prices and little vacant land. The future agriculture hub is part of a joint special economic zone launched last year by the two neighbors, expected to cost US$123 million and produce 10,000 tonnes of fresh produce annually. It is attracting Singaporean farmers with promises of cheaper land, labor and energy just over the border.
US actor Matthew McConaughey has filed recordings of his image and voice with US patent authorities to protect them from unauthorized usage by artificial intelligence (AI) platforms, a representative said earlier this week. Several video clips and audio recordings were registered by the commercial arm of the Just Keep Livin’ Foundation, a non-profit created by the Oscar-winning actor and his wife, Camila, according to the US Patent and Trademark Office database. Many artists are increasingly concerned about the uncontrolled use of their image via generative AI since the rollout of ChatGPT and other AI-powered tools. Several US states have adopted
A proposed billionaires’ tax in California has ignited a political uproar in Silicon Valley, with tech titans threatening to leave the state while California Governor Gavin Newsom of the Democratic Party maneuvers to defeat a levy that he fears would lead to an exodus of wealth. A technology mecca, California has more billionaires than any other US state — a few hundred, by some estimates. About half its personal income tax revenue, a financial backbone in the nearly US$350 billion budget, comes from the top 1 percent of earners. A large healthcare union is attempting to place a proposal before
KEEPING UP: The acquisition of a cleanroom in Taiwan would enable Micron to increase production in a market where demand continues to outpace supply, a Micron official said Micron Technology Inc has signed a letter of intent to buy a fabrication site in Taiwan from Powerchip Semiconductor Manufacturing Corp (力積電) for US$1.8 billion to expand its production of memory chips. Micron would take control of the P5 site in Miaoli County’s Tongluo Township (銅鑼) and plans to ramp up DRAM production in phases after the transaction closes in the second quarter, the company said in a statement on Saturday. The acquisition includes an existing 12 inch fab cleanroom of 27,871m2 and would further position Micron to address growing global demand for memory solutions, the company said. Micron expects the transaction to
RSS