Taiwan’s foreign exchange reserves hit new high

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Taipei, November 6 (CNA) Taiwan’s foreign exchange reserves hit a new record at the end of October, helped by higher returns on its reserve portfolio and a weaker US dollar that made its non-dollar assets more valuable in terms of dollars.

Taiwan’s foreign exchange reserves rose for the third consecutive month to US $ 546.70 billion at the end of October, up US $ 1.802 billion from the previous month, according to data released by the Central Bank of the Republic of China (Taiwan).

This meant that Taiwan still had the fifth largest foreign exchange reserves in the world after China (US $ 3.2 trillion in September), Japan (US $ 1.28 trillion in September), Switzerland (US $ 1.004 trillion in September), US dollars in September) and India (577.1 billion US dollars in October).

Tsai Chiung-min (蔡炯民), head of the bank’s foreign exchange department, said the weakness of the US dollar index, which tracks the currencies of the United States’ six major trading partners, has caused the Taiwan’s foreign exchange reserves in October.

According to the central bank, the US dollar index fell 0.93% last month.

The Canadian dollar, British pound, Swiss franc, Chinese yuan and euro rose 3.12%, 2.52%, 2.37%, 1.33% and 0.62% respectively against the US dollar. US dollar in October, while the Japanese yen fell 1.49% against the greenback.

Tsai said the US dollar is expected to strengthen as the US Federal Reserve plans to hike interest rates from mid-2022 after starting to cut asset purchases this month.

At the same time, at the end of October, the value of foreign investors’ holdings of Taiwanese stocks and bonds and deposits denominated in Taiwan dollars stood at $ 698.7 billion, compared to $ 691.3 billion a month earlier, the central bank said.

Those holdings represented 128% of Taiwan’s total foreign exchange reserves at the end of September, up one percentage point from the previous month, the central bank added.

Tsai said the holdings of foreign investors had hardly changed, with the Taiwan stock market rising 0.31% in October.

Foreign institutional investors were net sellers of NT $ 186 million of shares during the month, but including the cash dividends they remitted from Taiwan, the net sale rose to $ 5.43 billion. of NT dollars.

The central bank said it would maintain large foreign exchange reserves to ensure the stability of domestic financial markets and to guard against any sudden withdrawal of funds out of the country by foreign institutional investors.

(By Su Ssu-yun and Frances Huang)

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