The nation’s foreign exchange reserves last month increased by US$1.9 billion from the previous month to US$604.457 billion, the central bank said in a statement yesterday.
Last month’s figure set a record high, the bank’s data showed.
Foreign exchange reserves have risen for two consecutive months, as shifts in the exchange rate of other reserve currencies against the US dollar offset the net outflow of foreign capital and the central bank’s intervention to smooth out volatile capital flows, the bank said.
Photo: I-Hwa Cheng, AFP
As the US dollar index fell 1.35 percent last month, other major non-greenback currencies such as the British pound, euro, yen and the Australian dollar rose, boosting the central bank’s portfolio when the amount was converted into the US currency, an online report by the Chinese-language Liberty Times (the sister newspaper of the Taipei Times) said, quoting Department of Foreign Exchange Director-General Eugene Tsai (蔡烱民).
Returns from the bank’s management of reserve assets also contributed to the increase in foreign exchange reserves, Tsai told a news conference at the bank.
Taiwan’s foreign exchange reserves ranked fourth among major countries globally, after China, Japan and Switzerland, indicating that Taiwan’s external payment capacity and financial stability remain relatively robust, the central bank said.
The market value of securities investments and New Taiwan dollar-denominated deposits held by foreign institutional investors rose to US$1.297 trillion last month, equivalent to 215 percent of foreign exchange reserves, both the highest levels on record and compared with US$1.15 trillion and a ratio of 191 percent the previous month, central bank data showed.
While record-high foreign holdings in the Taiwanese stock market could increase currency market volatility, the central bank said it is not particularly worried as it has strengthened communication with major market players and foreign investors, and has a better management mechanism in place.
Foreign investors sold a net NT$8.99 billion (US$284 million) of local shares last month, the third-highest since 2022, data released by the Financial Supervisory Commission yesterday showed.
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