Foreign exchange reserves decline after three months of gains

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  • By Crystal Hsu / Journalist

The country’s foreign exchange reserves fell last month from $ 206 million to $ 543.08 billion, as foreign portfolio investors reduced their holdings of local stocks and repatriated cash dividends distributed by big tech companies. local, the central bank said.

The latest figure ended three straight months of gains in a stable US dollar and weaker euro, as the Chinese yuan, Japanese yen and British pound strengthened, the foreign exchange department chief executive said, Eugene Tsai (蔡炯民). press conference Thursday.

TAIEX lost 2% last month, as unrest mounted on global stock markets over the more contagious Delta variant of SARS-CoV-2 in the United States, Europe and Asia, propelling 6.02 billion US dollars of foreign funds to flee Taiwan.

Capital outflows were boosted by investment gains and cash dividend payments from chipmaker Taiwan Semiconductor Manufacturing Co (台積電) and chip designer MediaTek Inc (聯 發 科), the central bank said.

The central bank has not commented on whether capital outflows will persist this month, as more tech and non-tech companies are expected to hand out cash dividends.

The change in foreign exchange reserves was insignificant, and Taiwan’s foreign currency holdings still ranked fifth in the world, after China, Japan, Switzerland and India, Tsai said.

“The forex market has remained stable,” Tsai said, adding that local insurance companies helped outflows as they tried to seek better returns in foreign markets.

Taiwanese exporters, on the other hand, have given their support to the new Taiwan dollar by converting much of their export earnings into the local currency, he said.

As of last month, foreign institutional investors still held US $ 698.3 billion in local securities and bonds, equivalent to 129 percent of the country’s foreign exchange reserves, Tsai said.

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