Foreign exchange reserves reach $543 million

The central bank eased its intervention in the local foreign exchange market by trading back and forth as it sought to stabilize the NT dollar, a bank official said.

  • By Crystal Hsu / Staff Reporter

Taiwan’s foreign exchange reserves reached $542.79 billion last month, up $1.69 billion from the previous month and ending a three-month decline on the back of bond yields and valuation gains in other reserve currencies, the central bank said on Friday.

“The market appeared relatively stable last month compared to the previous three months, although foreign funds continued to withdraw from Taiwan in expectation of further monetary tightening from the US Federal Reserve,” he said. Foreign Exchange Department Director General Eugene Tsai (蔡炯民) said. an online press conference in Taipei.

Foreign money managers transferred more than $3 billion in cash dividends and capital gains offshore last month, in line with asset price and risk premium repricing, Tsai said.

Photo courtesy of Union Bank of Taiwan

The trend is expected to continue for some time after the Fed indicated on Wednesday that it would raise interest rates further to fight inflation.

Global financial markets have largely priced in the Fed’s measures, which explains a recent slowdown in capital outflows, Tsai said.

The New Taiwan Dollar held steady against the U.S. dollar last month and has seen a slight gain so far this month, he said.

The pound advanced 4.73% against the greenback last month, the euro gained 1.68% and the Chinese yuan gained 2.28%, Tsai said.

The central bank eased its intervention in the local foreign exchange market by trading back and forth, in a bid to stabilize the NT dollar, Tsai said.

The central bank had to aggressively sell US dollars in July, August and September, he said.

Tsai was hesitant to say the worst is over, citing economic headwinds hanging over the country and abroad.

Statistics show that Fed interest rate hikes do not necessarily accompany TAIEX corrections and NT dollar depreciations, Tsai said, adding that businesses and investors are advised against panic selling in local currency .

It is common for local exporters to exchange US dollars for local currency towards the end of the year to fund expenses such as bonuses, he said.

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