Taipei, Taiwan's foreign exchange reserves as of the end of May hit a new high, largely on increased returns from the central bank's fund management, the bank said Tuesday.
As of the end of May, Taiwan's forex reserves amounted to US$457.27 billion, an increase of US$144 million from a month earlier, the central bank's data shows.
The bank said however that the euro depreciated 3.3 percent against the U.S. dollar in May, making it the primary factor to buck the growth trend of Taiwan's forex reserves in the U.S. dollar.
Holdings of Taiwanese stocks, bonds and Taiwan dollar-denominated deposits by foreign investors were up US$4 billion in May from a month earlier after the local main board rose about 2 percent, which also contributed to Taiwan's forex gains, said Harry Yen (???), head of the central bank's Foreign Exchange Department.
Foreign-held assets at the end of May were equivalent to about 86 percent of Taiwan's foreign exchange reserves, Yen said.
According to the Taiwan Stock Exchange, foreign institutional investors sold a net NT$32.40 billion (US$1.08 billion)-worth of shares on the main board in May.
Regarding the possibility of additional interest rate hikes by the Fed in the upcoming Federal Open Market Committee (FOMC) policy meeting, Yen said the increase is a "sure bet," prompted by a drop in the U.S. unemployment rate to a historic low of 3.8 percent.
Asked about a possible rise in the U.S. dollar, Yen said it will depend largely on the development of the global financial market, as well as the performance of the U.S. economy in the coming months.
Source: Focus Taiwan News Channel
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