Forex settlement ceiling raised as Taiwan aims to be wealth management hub

Taipei, Nov. 1 (CNA) The foreign exchange settlement limit for individuals and enterprises was raised on Friday as part of Taiwan's bid to establish itself as a regional wealth management hub, the central bank said.

The central bank said that given the growth in wealth and rising demand for investing in Taiwan, the yearly limit of money individuals can exchange to foreign currencies or from foreign currencies to Taiwan dollars has been raised to US$10 million from US$5 million. The maximum for enterprises has been increased to US$100 million from US$50 million.

Tsai Chiung-min (蔡炯民), head of the central bank's Foreign Exchange Department, said the increase in the ceiling was made to support the government's goal of Taiwan becoming a wealth management hub in Asia.

The bank said individuals wanting to exchange more than the maximum can apply to the central bank, meaning that despite the ceiling, funds can flow freely to and from Taiwan.

According to the central bank, the forex settlement ceiling for individuals was last adjusted in 1992 when the maximum amount was raised to US$5 million from US$3 million. In 1997, the maximum amount for enterprises was increased to US$50 million from US$20 million.

As there are no limits on forex settlement for purposes of export or import purposes and purchases of marketable securities through local financial institutions, it has been rare for individuals and enterprises to hit the annual ceiling, the central bank said.

According to the central bank, in 2023, individual foreign currency sales averaged US$96,000, while purchases averaged US$133,000. For enterprises, average foreign currency sales hit US$1.016 million, and average purchases reached US$1.098 million.

The central bank said that based on these figures, foreign exchange conducted by individuals and companies represented less than 5 percent of the yearly limit.

Citing data compiled by the Directorate General of Budget, Accounting and Statistics, the central bank said Taiwan's gross domestic product (GDP) per capita rose to US$32,319 in 2023, up 55 percent from US$20,866 in 2011.

In addition, the central bank said overseas securities investments by Taiwanese nationals had hit US$1.39 trillion by the end of 2023. This represents a 348 percent increase from US$310 billion in 2011, suggesting demand for wealth management may be on the rise.

The central bank said Taiwan's forex reserves at the end of 2023 stood at US$570.6 billion, up 48 percent from US$385.6 billion in 2011, demonstrating the country has been resilient to take on volatility in the forex market.