Aug 05, 2019 General Comments Off on Taiwan’s forex reserves hit new high at end of July
Taipei, Taiwan's foreign exchange reserves hit a record high at the end of July largely because of higher returns on the central bank's investment portfolio, the bank said Monday.
The country's forex reserves were US$467.23 billion as of the end of July, up US$261 million, or 0.06 percent, from a month earlier, according to data compiled by the central bank.
The increase was smaller than the monthonmonth rise of US$2.54 billion in June, however, because a weaker euro dragged down the U.S. dollar value of eurodenominated assets in the central bank's investment portfolio.
At the end of July, the holdings of Taiwanese stocks, bonds and Taiwan dollardenominated deposits by foreign investors totaled US$376.8 billion, up from US$367.9 billion at the end of June.
As a result, foreignheld assets at the end of July were equal to about 81 percent of Taiwan's foreign exchange reserves, up from 79 percent in June, central bank data showed.
The increase in foreignheld assets mainly reflected the buying of shares on Taiwan's stock market by foreign institutional investors during the month, when the weighted index on the Taiwan Stock Exchange gained 0.87 percent.
Meanwhile, the central bank said the volatility of the Taiwan dollar against the U.S. dollar on Monday resulted from external factors, referring to a plunge in the Chinese yuan.
On Monday, the U.S. dollar rose NT$0.252 or 0.8 percent against the Taiwan dollar in the wake of a dive of the yuan against the greenback at a time of escalating trade friction between the United States and China.
The U.S. dollar breached the 7 yuan mark for the first time since 2008 after the People's Bank of China (PBOC) set the yuan's reference price against the greenback at 6.9225 yuan.
The central bank remained tightlipped about whether it intervened in the local foreign exchange market to stabilize the Taiwan dollar Monday, reiterating only that the Taiwan dollar's value was decided by a market mechanism.
It did say, however, that it would intervene if necessary to maintain market order.
In the previous two months, the central bank made a rare admission that it had intervened in the forex market.
In May, the central bank sold the U.S. dollar to prevent the Taiwan dollar from falling further while in June it bought the greenback to slow the pace of the local currency's appreciation.
Source: Focus Taiwan News Channel