Taiwan's gold reserve supports value of national currency: Central bank

Taipei, Aug. 16 (CNA) Taiwan has about 422 tonnes of gold in reserve, held by the Central Bank of the Republic of China (Taiwan) to support the value of the national currency, a central bank official said on Friday.

Of that amount, 410 tonnes is retained as an asset for the issuance of New Taiwan dollars, the official added.

The remaining reserve is utilized, normally once every four years, to mint commemorative gold coins for the inauguration of Taiwan's newly elected president and vice president, the official said.

According to the World Gold Council's latest rankings as of Aug. 2, Taiwan ranked 12th in global gold reserves in the first quarter of 2024, with the top three countries being the United States, Germany and Italy,

Based on New Taiwan dollar banknotes already in circulation, the central bank said it has the equivalent amount in liquid assets, currently in the form of gold and foreign exchange.

The purpose is to support and guarantee the value of the national currency as gold has always played an important role in the international monetary system, it added.

Gold reserves serve as a key risk management tool for countries in times of crisis, as they provides a buffer against unforeseen events such as war and financial instability.

Although gold prices have skyrocketed in recent years, the central bank said it is neither adding to nor selling its gold reserve.

According to the central bank, most of the gold it currently holds in reserves was purchased in the 1970s to balance the trade surplus between Taiwan and the United States.

During that period, gold was valued at less than US$400 per ounce, and has since soared to US$2,450 per ounce. With a weakening New Taiwan dollar, the country's unrealized gain has reached nearly NT$900 billion.

An unrealized gain or loss is the change in value of a stock, bond or other asset that was purchased but has not yet been sold.