Forex losses result in losses to labor funds in May

Taipei, July 1 (CNA) Foreign exchange losses caused by a stronger Taiwan dollar led funds managed by the Bureau of Labor Funds to lose NT$92.9 billion (US$3.18 billion) in May, bureau data showed Tuesday.

Accumulated losses, which reflect decreases in the value of assets in the funds' portfolios and/or declines in income on investments, rose to NT$291.97 billion in the first five months of this year after the loss in May.

While concerns over trade friction between the United States and China eased, sending major markets higher, the rapid appreciation of the Taiwan dollar against the U.S. dollar resulted in forex losses in overseas assets when their value was converted to the Taiwan dollar.

In May, the local currency soared NT$2.088, or nearly 7 percent, against the U.S. dollar amid market speculation that the U.S. had pressured Taiwan to allow its currency to appreciate as part of ongoing trade and tariff negotiations between the two sides.

Taiwan's central bank denied, however, that it came under pressure from Washington.

The Taiex, the weighted index on the Taiwan Stock Exchange, fell 7.33 percent in May, but the MSCI World Index rose 5.32 percent and the Bloomberg Global Aggregate Index grew 5.28 percent.

According to the bureau, 56.91 percent of the investments made by the labor funds were made overseas and the remaining 43.09 percent was invested domestically.

The combined value of the funds managed by the bureau, including the Labor Pension Fund, the Labor Retirement Fund, the Labor Insurance Fund, the Employment Insurance Fund, and the Arrear Wage Payment Fund, totaled NT$6.89 trillion as of the end of May.

Based on that amount, the NT$291.97 billion losses represented a rate of return of minus 4.26 percent in the first five months of this year, according to the bureau.

The value of assets in the new Labor Pension Fund, launched in 2015, totaled NT$4.55 trillion at the end of May, the highest of any fund, and its rate of return so far this year to the end of May was minus 4.32 percent, the bureau said.

The Labor Retirement Fund, which has been in place since 1984, had about NT$1.03 trillion in assets as of the end of May, with a rate of return of minus 4.17 percent, the bureau said.

Meanwhile, the Bureau of Public Service Pension Fund said on Tuesday that the Public Service Pension Fund managed by the bureau had NT$45.32 billion in losses in the first five months of 2025, with a rate of return of minus 4.52 percent.