Taiwan central bank adjusts forex reserves management amid concerns over U.S. Treasuries

Taipei, Jan. 26 (CNA) Taiwan's central bank has adopted some dynamic adjustments in its portfolio management of the country's foreign exchange reserves, in an effort to reduce possible risks resulting from fluctuations in U.S. Treasury bonds, Central Bank Governor Yang Chin-long (楊金龍) said Monday.

Yang made the statement during a hearing of the Legislative Yuan's finance committee when asked about reports that Danish pension operator AkademikerPension was planning to sell US$100 million worth of U.S. Treasuries amid unease over U.S. President Donald Trump's push for control of Greenland.

Amid increasing efforts by several countries to decouple from the United States, U.S. Treasuries have encountered growing volatility, lawmakers noted, expressing concern about the stability of Taiwan's foreign reserves.

Noting that Taiwan is the 10th largest holder of U.S. Treasury bonds, Kuomintang (KMT) Legislator Wang Hung-wei (王鴻薇) asked whether Taiwan's central bank would cut its positions in U.S. government bonds or adjust its portfolio of Taiwan's forex reserves to lower the risks.

In response, Yang said the central bank will move to lower the risks for Taiwan's forex reserves by cutting or adjusting U.S. Treasury bond positions. "That goes without saying," he added.

As of the end of 2025, Taiwan's forex reserves stood at US$602.55 billion, its second-highest ever.

During the legislative hearing, Yang downplayed the concerns raised recently by the International Monetary Fund (IMF) over Taiwan's exposure to U.S. dollar-denominated assets.

In its latest Global Financial Stability Report, the IMF said Taiwan's exposure to U.S. dollar-denominated assets was 45 times its forex market size, compared to South Korea, where the exposure was 25 times its forex market size.

Yang said, however, that Taiwan's central bank has a different exposure estimate, which is only 20 times the size of its forex market.

"We are not nervous," Yang said, adding that the IMF is not very familiar with Taiwan's market and that some of its past forecasts of Taiwan's economic growth have been far off the mark.

While Taiwan has agreed in a recent trade deal to provide US$250 billion in credit guarantees for financial institutions to invest in the U.S. market, it still maintains adequate foreign currency-denominated capital in the domestic market, he said.

The central bank, therefore, will have no need to use any of the country's forex reserves as credit guarantees in the short term, he added.

According to the central bank's estimate, Taiwan's surplus savings stand at NT$5.42 trillion (US$172 billion) and are enough to support overseas investments by Taiwanese enterprises.