AI FRENZY:
Foreign investors’ holdings of Taiwanese equities, bonds and NT dollar-denominated deposits also rose to a new high of US$837.1 billion in a market boom
Taiwan’s foreign exchange reserves at the end of last month continued to reach new highs on the back of an increase in returns from the central bank’s management of its investment portfolio, the monetary authority said on Friday.
The exchange movements of non-US dollar currencies against the greenback was another factor behind the foreign exchange reserve changes last month, the central bank said.
In addition, the value of foreign investors’ holdings of Taiwan-listed stocks and bonds, and New Taiwan dollar-denominated deposits also hit a new record high in a boom of the equity market, it added.
Photo: Reuters
The central bank’s data showed that foreign exchange reserves rose US$496 million from a month earlier to US$573.3 billion. It was the second consecutive month that the foreign exchange reserves increased, the data indicated.
Last month, the US dollar index, which tracks the currencies of Washington’s six major trading partners against the greenback, rose 1.14 percent, the central bank said.
The NT dollar lost 0.21 percent against the US dollar last month, while the yuan fell 0.61 percent.
The yen plunged 2.6 percent, the euro shed 1.16 percent, the pound fell 0.71 percent, the Canadian dollar lost 0.34 percent and the Australian dollar dropped 0.14 percent last month, the bank said.
Compared with other currencies, the NT dollar appeared resilient after volatility in April and May, so the central bank made limited efforts to intervene, Department of Foreign Exchange Director-General Tsai Chiung-min (蔡炯民) said.
At the end of last month, the holdings of Taiwan’s equities, bonds and NT dollar-denominated deposits by foreign investors rose to a new high of US$837.1 billion, which represented 146 percent of the country’s total foreign exchange reserves.
The ratio was also at the highest level, the central bank said.
Tsai said the record high in holdings by foreign investors reflected a highflying stock market last month as the TAIEX rose more than eight percent to top the 23,000 point mark in the month amid a frenzy about artificial intelligence.
The central bank’s data showed that Taiwan ranked as the world’s fifth-largest foreign exchange reserve holder, following China, Japan, Switzerland and India.
China remained the world’s largest holder of foreign exchange reserves, which fell US$9.68 billion to US$3.222 trillion at the end of last month as the yuan faced continued downward pressure amid a strengthening US dollar, the Chinese State Administration of Foreign Exchange said yesterday.
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