Taiwan’s foreign exchange reserves up for the second consecutive month

Taipei, June 5 (CNA) Taiwan’s foreign exchange reserves increased for the second consecutive month in May due to the appreciation of world currencies against the US dollar and higher returns on the bank’s portfolio, according to the bank central part of the country.

Taiwan had foreign exchange reserves of US $ 542.98 at the end of May, up US $ 1.87 billion from the previous month and second in history to US $ 543.33 billion in recorded reserves at the end of February, according to central bank data.

Tsai Chiung-min (蔡炯民), head of the bank’s foreign exchange department, said the US dollar index, which tracks the value of the greenback against the currencies of the United States’ six major trading partners, has fallen. 1.59% in May.

This reflects the weakness of the US dollar, the increase in foreign exchange reserves in May in US dollars due to the rise in the value of other currencies in the portfolio.

In May, the euro rose 1.72% against the US dollar, the Chinese yuan gained 1.74%, the pound sterling rose 2.82% and the South Korean won appreciated by 0.13%, Tsai said.

The Taiwan dollar also benefited from the greenback’s weakness, gaining 1.06% against the US dollar in May, Tsai said.

However, the Japanese yen resisted the rally, losing 0.25% against the US dollar in May, according to the central bank.

According to the central bank, Taiwan had the fifth highest foreign exchange reserves in the world in May, behind China’s $ 3.198 trillion (April), Japan’s $ 1.295 trillion (April), and Japan’s $ 1.295 trillion (April). US $ 004 trillion from Switzerland (April) and US $ 548.5 billion from India (May).

Tsai said the inflow of funds into and out of Taiwan in May remained stable, with some foreign investors continuing to move funds to Taiwan and domestic life insurance companies placing their money in foreign securities.

According to the Financial Supervisory Commission (FSC), Taiwan’s main financial regulator, foreign institutional investors recorded a net inflow of US $ 3.247 billion in May, despite an escalation in nationally transmitted COVID-19 cases.

The COVID-19 outbreak contributed to the fall of the Taiex, the weighted benchmark of the Taiwan Stock Exchange, by 498.23 points or 2.84% in May.

FSC data showed global net inflows of foreign funds hit a new high of US $ 221.38 billion at the end of May, a figure that has been rising since Taiwan lifted the ban on institutional investment. foreigners on the local stock market in late 1990.

Meanwhile, the value of foreign investors’ holdings of Taiwan dollar-denominated stocks, bonds and deposits at the end of May was US $ 715.40 billion, compared to US $ 727.2 billion at the end. April due to recent market losses caused by COVID. -19 scared.

These holdings represented 132% of Taiwan’s total foreign exchange reserves at the end of May, up from 134% at the end of the previous month, according to central bank data.

The central bank said it would continue to guarantee sufficient foreign exchange reserves to maintain stable financial markets at home and protect against the possibility of foreign institutional investors suddenly moving their funds out of the country.

(By Su Szu-yun, Hsieh Fang-wu and Frances Huang)

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