Forex reserves top US$560bn – Taipei Times

• By Crystal Hsu / Staff reporter

The nation’s foreign exchange reserves last month grew US$1.91 billion to a record US$560.28 billion, as the US dollar weakened after the collapses of US regional banks and Switzerland’s Credit Suisse Group AG, boosting the value of assets in other currencies, the central bank said yesterday.

The currency movements were related to market expectations that the US Federal Reserve would raise its policy rate one more time before its pauses tightening to help support the economy and financial stability, Department of Foreign Exchange Director-General Eugene Tsai (蔡炯民) told an online news conference.

The US dollar is unlikely to appreciate, as recession concerns deepen following a series of bank failures caused in part by drastic interest rate hikes that are weighing on bonds and securities held by financial institutions.

Photo: CNA

The Fed has since introduced temporary and selective easing measures to avoid a credit crunch.

The trend could explain why the British pound advanced 3.11 percent against the US dollar, the Euro rose 2.91 percent, the yuan increased 1.08 percent and the New Taiwan dollar gained 0.09 percent, Tsai said.

Taiwan’s foreign exchange market was relatively quiet, with less need for interventions, he said.

Foreign portfolio managers remitted US$3.79 billion of principal, but wired a similar amount of profit abroad, Tsai said.

The central bank’s management also helped shore up a foreign exchange reserve balance that gave Taiwan the fourth-highest ranking after China, Japan and Switzerland, Tsai said.