Taiwan’s foreign exchange reserves at the end of last month fell below US$600 billion as the central bank stepped in to sell the US dollar to prevent it from appreciating further against the New Taiwan dollar.
Data released on Friday by the central bank showed that the country’s forex reserves fell US$406 million from October to US$599.79 billion — the second consecutive month that forex reserves moved lower.
November was a traditional peak cash dividend payment month, as many foreign institutional investors rushed to move their funds out of Taiwan, placing the NT dollar under pressure, Department of Foreign Exchange Director-General Eugene Tsai (蔡烱民) told reporters.
Photo: AFP
Foreign institutional investors remitted about US$11 billion funds out of Taiwan, including cash dividends and earnings they received, the highest amount in eight months, Tsai said.
Taiwan’s forex reserves hit a new high of NT$602.94 billion at the end of September, the first time it stood above the US$600 billion level, as the central bank bought the greenback to prevent the NT dollar from rising too fast.
However, in October and last month, market conditions changed as a weakening NT dollar forced the central bank to intervene by selling the US dollar, sending the country’s forex reserves lower.
Foreign investors held US$1.09 trillion in Taiwan-listed stocks, bonds and NT dollar deposits at the end of last month, down from a record high of US$1.15 trillion in October, central bank data showed.
The holdings were 182 percent of Taiwan’s total forex reserves last month, down from 192 percent in October, due to weakness in the local stock market, where the TAIEX fell 2.15 percent.
Meanwhile, the central bank announced it would release its first set of quarterly market intervention data next month for its third-quarter intervention.
In the past, the central bank released such data every six months, but it last month said that after consulting with the US Department of the Treasury, it decided to release the data on a quarterly basis — in January, April, July and November — to enhance market transparency.
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