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Taiwan's forex reserves hit new high in November

2017/12/05 20:33:16

Taipei, Dec. 5 (CNA) Taiwan's foreign exchange reserves at the end of November hit a new high on the back of an increase in returns on funds managed by the central bank, the bank's data showed Tuesday.

The central bank said the increase in forex reserves in November also reflected the euro's appreciation against the U.S. dollar to boost the total assets, since the European currency is part of the central bank's assets management portfolio.

As of the end of November, forex reserves totaled US$450.47 billion, up US$2.68 billion from a month earlier, the statistics indicate.

It was the eighth consecutive month in which the forex reserves moved higher, the central bank said.

Harry Yen (顏輝煌), head of the central bank's foreign exchange department, said higher investment returns from the bank's assets management continued to serve as a driver to the higher forex reserves.

Yen said a stronger euro, which rose 1.9 percent against the U.S. dollar in November, helped boost the value of forex reserves in U.S. dollar terms after the European currency-denominated assets were converted to the greenback.

As of the end of November, holdings of Taiwanese stocks, bonds and Taiwan dollar-denominated deposits by foreign investors fell US$9.4 billion from a month earlier to US$391.8 billion, Yen said.

The decline in foreign investors' holdings in local equities, bonds and Taiwan dollar deposits largely came after a fall in the local stock market, which shed 2.2 percent in the wake of a large net sell-off recorded by foreign institutional investors in November, Yen added

According to the Taiwan Stock Exchange, foreign institutional investors sold a net NT$47.46 billion (US$1.58 billion)-worth of shares on the main board in November.

Yen said the foreign-owned assets were equivalent to 87 percent of Taiwan's total forex reserves in November, down from 90 percent -- a record high percentage -- seen in October.

The central bank is determined to maintain sufficient forex reserves by raising investment returns, guaranteeing secure local financial markets even if foreign institutional investors scramble to move funds out of the country.

Meanwhile, Yen said, the U.S. Federal Reserve is very likely to raise its key interest rates in an upcoming policymaking meeting scheduled for next week, the last meeting for 2017.

However, since the rate hike has been anticipated by many market analysts, the Fed's decision is not expected to have much impact on global financial markets, Yen said.

(By Chiu Po-sheng and Frances Huang)