Taiwan forex reserves hit another high, but growth moderates
Taipei, March 6 (CNA) Taiwan's foreign exchange reserves at the end of February continued to hit a new high, but month-on-month growth moderated, according to the central bank.
Data compiled by the bank showed the country's forex reserves as of the end of February totaled US$543.33 billion, up US$1.85 billion from a month earlier, marking the 21st consecutive month for the figure to smash records.
However, the latest month-on-month growth moderated from the significant increase of US$11.57 billion seen at the end of January, US$16.51 billion at the end of December, and US$12.16 billion at the end of November.
Commenting on the lower growth, Tsai Chiung-min (蔡炯民), head of the bank's Foreign Exchange Department, said the relatively mild increase in forex reserves in February came after supply and demand tilted toward a balance in the local forex market.
In the previous few months, the central bank was seen stepping into the forex market to slow down the pace of the Taiwan dollar's appreciation against the U.S. dollar by buying into the green back, a move cited as part of the factors that boosted the forex reserves in the country.
While Tsai did not disclose whether the central bank further intervened in February, he quoted statistics released by the Financial Supervisory Commission (FSC) as saying Taiwan recorded a net fund outflow of about US$20 million in February, indicating such a supply-demand balance in the market as investors adjusted their portfolios.
Due to the moderate growth in February, Taiwan dropped one notch to become the sixth largest forex reserves holder in the world, replaced by Russia, which owned US$585.7 billion in forex reserves as of mid-February, the central bank said.
China remained on the top in the rankings as it owned US$3.35 trillion as of the end of January, according to the central bank.
It said the growth in Taiwan's forex reserves in February partly reflected higher returns from the bank's investments.
In addition, non-U.S. dollar currencies in the central bank's investment portfolio appreciated against the greenback so when the assets were converted into the U.S. dollar, the value increased accordingly, the bank said.
According to the bank, the euro rose 0.5 percent, the British pound swelled 2.07 percent, the Canadian dollar appreciated 2.13 percent, and the Australian dollar added 2.72 percent against the U.S. dollar in February.
Meanwhile, the value of foreign investor holdings in Taiwanese stocks, bonds and Taiwan dollar-denominated deposits as of the end of February stood at US$670.3 billion, up US$24.6 billion from the end of January, due to a strong showing by the local equity market.
Those holdings represented 123 percent of Taiwan's total foreign exchange reserves as of the end of February, a record high, up from 119 percent at the end of the previous month, the central bank's data showed.
In February, the benchmark weighted index on the Taiwan Stock Exchange rose 85.49 points or 5.39 percent.
The central bank said it will continue to ensure ample forex reserves to maintain stable financial markets at home and protect against the possibility of foreign institutional investors suddenly moving their funds out of the country.
25 PLA planes fly through Taiwan's ADIZ on Monday, most this year04/12/2021 10:36 PM
- Science & Tech
Taiwanese researchers suggest new treatment for COVID-19: study04/12/2021 09:54 PM
Taiwan voices concerns over Japan's plan to dump radioactive water04/12/2021 09:27 PM
Drought at Techi Reservoir persists, threatening water supply04/12/2021 09:13 PM
Proposed amendments list 'acts of omission' as form of animal abuse04/12/2021 08:37 PM