Forex reserves hit record US$546.70bn

WEAK GREENBACK:
Taiwan had the world’s fifth-largest stock in foreign currencies and profited as major currencies gained against the US dollar, the central bank said

Taiwan’s foreign-exchange reserves hit a record at the end of last month, helped by higher returns on its reserve portfolio and a weaker US dollar that made its non-US dollar assets more valuable.

The reserves increased for the third consecutive month to US$546.70 billion, up US$1.802 billion from September, the central bank said on Friday.

That meant Taiwan had the fifth-largest foreign-exchange reserves in the world after China (US$3.2 trillion), Japan (US$1.28 trillion), Switzerland (US$1.004 trillion) and India (US$577.1 billion).

Photo: CNA

Department of Foreign Exchange Director-General Eugene Tsai (蔡炯民) said that the weakness of the US dollar index, which tracks the currencies of the US’ six major trading partners, drove the increase in Taiwan’s reserves.

The index fell 0.93 percent last month, the central bank said.

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

Tsai said the US dollar is expected to become stronger as the US Federal Reserve considers raising interest rates starting in the middle of next year, after beginning to downsize its asset purchases this month.

Meanwhile, the value of foreign investor holdings in Taiwanese stocks, bonds and New Taiwan dollar-denominated deposits totaled US$698.7 billion, up from US$691.3 billion in September, the central bank said.

Those holdings represented 128 percent of Taiwan’s total foreign exchange reserves, up 1 percentage point from the previous month, the bank added.

Tsai said that the amount of holdings by foreign investors were largely unchanged as Taiwan’s stock market rose 0.31 percent last month.

Foreign institutional investors were net sellers of NT$186 million of shares during the month, but when including cash dividends they remitted out of Taiwan, the net sell increased to NT$5.43 billion, the central bank said.