Taiwan's Forex Reserves Soar to New Heights After Strategic Market Moves

Central Bank Intervention and Portfolio Gains Drive Record-Breaking Foreign Exchange Reserves in Taiwan

Taipei, May 6 - Taiwan's foreign exchange reserves reached an unprecedented level at the close of April, fueled by the Central Bank's strategic interventions in the forex market to stabilize the local currency. The bank's actions, primarily involving the purchase of U.S. dollars, were aimed at mitigating the appreciation of the Taiwan dollar amidst volatile global economic conditions.

Data released by the Central Bank revealed that the country's forex reserves totaled US$582.83 billion at the end of April, marking an increase of US$4.81 billion from the previous month.

Tsai Chiung-min (蔡炯民), Head of the Central Bank's Foreign Exchange Department, elaborated that the rise in reserves was a direct consequence of the bank's intervention to curb the Taiwan dollar's strengthening against the U.S. dollar. The intervention aimed to ease market fluctuations.

The U.S. dollar index experienced a decline in April, dipping below the crucial 100 mark. This occurred after the announcement of "reciprocal" tariffs by U.S. President Donald Trump, which impacted the greenback's value against major trading partners.

In April alone, the U.S. dollar saw a 3.64 percent decrease in value against the Taiwan dollar.

Tsai further explained that the conversion of non-U.S. dollar denominated assets within the forex reserves into the greenback also contributed to the overall growth in April.

Moreover, Tsai highlighted that gains from the Central Bank's portfolio management activities further bolstered the forex market at the end of April.

Simultaneously, Central Bank data showed that the value of foreign investors' holdings of Taiwan-listed stocks, bonds, and Taiwan dollar-denominated deposits increased to US$721.9 billion at the end of April, up from US$708.9 billion the previous month.

These holdings represented 124 percent of Taiwan's total forex reserves at the end of April, an increase from 123 percent at the end of March.

The Central Bank emphasized its commitment to maintaining robust forex reserves. This strategy is designed to ensure the stability of domestic financial markets and protect against potential sudden outflows of funds by foreign institutional investors.