Taiwan’s foreign exchange reserves last month slipped by US$1.13 billion to US$577.93 billion, as the central bank intervened a few times to shore up the local currency, the top monetary policymaker said yesterday.
Although the US dollar weakened 1.3 percent against other major currencies, the central bank spotted abnormal fund movements for a few days and waded in to help maintain the market’s stability, Department of Foreign Exchange Director-General Eugene Tsai (蔡炯民) said at a media briefing.
Investors at home and abroad had expected the greenback to lose momentum, in line with interest rate cuts of 50 basis points by the US Federal Reserve on Sept. 18.
Photo: CNA
However, depreciation expectations receded after Fed Chairman Jerome Powell later dismissed the chances of similar cuts for the rest of this year.
US bond yields recently returned to levels that were similar to before the rate cut, Tsai said.
Even so, the euro last month gained 0.77 percent against the US dollar, the pound rose 1.69 percent, the yen picked up 1.64 percent, the yuan increased 1.33 percent and the Australian dollar climbed 1.84 percent, Tsai said.
Capital outflows totaling US$6 billion accounted for the earlier swings in the NT dollar, the official said, adding that foreign portfolio managers wired abroad cash dividends and took profit in local shares, which rallied to relatively high levels last month.
Despite the lackluster showing, Taiwan remained the world’s fifth largest foreign exchange holder after China, Japan, Switzerland and India, Tsai said.
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