Forex reserves hit new high in March

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Central bank data shows the country’s Forex reserves at US$464.08 billion at the end of March, an increase of US$143 million from a month earlier. (NOWnews)

TAIPEI (CNA) — Taiwan’s foreign exchange reserves (Forex) climbed to a new high for the fifth consecutive month at the end of March, largely on the back of an increase in returns on the Central bank’s portfolios, according to the bank.

Central bank data showed the country’s Forex reserves at US$464.08 billion at the end of March, an increase of US$143 million from a month earlier.

The increase was offset to some extent by the euro’s depreciation against the U.S. dollar with the conversion of European currency-denominated assets in the Central bank’s portfolio to U.S. dollars, the bank said on April 5.

In March, the U.S. dollar moved higher against other major currencies in the world, with the euro falling 1.29 percent against the greenback, according to the Central bank.

Nonetheless, the Central bank said, its management of its investment portfolio helped increase the country’s Forex reserves, as returns remained steady return as of the end of March.

The holdings of Taiwanese stocks, bonds and Taiwan dollar-denominated deposits by foreign investors stood at US$370.8 billion at the end of March, up US$8.4 billion from a month earlier and the highest in six months, the bank’s data showed.

As a result, foreign-held assets at the end of March were equivalent to about 80 percent of Taiwan’s foreign exchange reserves, up from 78 percent the previous month, the Central bank data indicated.

The Central bank said the increase in foreign-held assets mainly reflected a decision by foreign institutional investors to remit funds into Taiwan in March, as they rushed to pick up local shares in the booming equity market.

Statistics from the Financial Supervisory Commission showed foreign institutional investors registered about US$1.746 billion in net fund inflows into Taiwan in March, while the weighted index on the Taiwan Stock Exchange rose 2.42 percent.

The gains in local equities, in turn, boosted the value of the assets held by foreign institutional investors last month, the Central bank said.

Taiwan’s Forex reserves were the fifth highest in the world, after China’s US$3.09 trillion, Japan’s US$1.22 trillion, Switzerland’s US$741.6 billion and Saudi Arabia’s US$474 billion, the bank said.

The Central bank has said it is committed to maintaining ample Forex reserves by improving investment returns to guarantee secure financial markets at home, even if foreign institutional investors move funds out of the country.

By Pan Tzu-yu and Frances Huang