Taipei: Finance Minister Chuang Tsui-yun expressed openness to expanding the NT$500 billion (US$15.37 billion) National Financial Stabilization Fund to better manage the effects of adverse external factors on the local stock market. Chuang’s remarks were made during a session of the Legislative Yuan’s Finance Committee, where she noted the significant rise in market capitalization over the past decade as a basis for potentially increasing the fund’s size.
According to Focus Taiwan, Chuang previously indicated at a legislative hearing that the Ministry of Finance (MOF) has been evaluating the possibility of enlarging the stabilization fund. This consideration will be addressed following an amendment proposal by Democratic Progressive Party (DPP) lawmaker Kuo Kuo-wen to raise the fund’s size to NT$1 trillion.
The financial stabilization fund, as outlined by the statute, has two borrowing sources. One allows borrowing from financial institutions, using stock held by the National Treasury as collateral, with a limit of NT$200 billion. The other source includes borrowing from the postal deposit system and various insurance and pension funds, capped at NT$300 billion. Kuo proposed removing these ceilings to grant the fund more flexibility in market interventions.
Established in 2000, the stabilization fund acts as a safeguard against unforeseen external disruptions to the local bourse. Kuo highlighted that since its inception, the market’s value has soared from NT$8 trillion to over NT$70 trillion today. The fund’s committee recently intervened amid market turbulence caused by the Trump administration’s tariff threats, marking its ninth intervention since establishment.
The recent imposition of a 32 percent tariff on Taiwanese goods by the United States led to a significant drop in the Taiex index, which fell by 1,440.55 points or 6.76 percent. However, a recovery was observed after a temporary pause on the new measures was announced, with reduced tariffs applied to countries other than China.
Chuang noted that the stabilization fund has yet to utilize the second borrowing source, with Vice Finance Minister Juan Ching-hua serving as the fund’s executive secretary, managing fund operations to bolster market stability and investor confidence. Chuang also observed a decline in stock market turnover, attributing it to investor caution amid ongoing tariff concerns affecting global economic conditions.
The MOF reported that the average combined turnover of the main board and the over-the-counter market decreased to NT$400.4 billion in March, reflecting a 27.4 percent drop from the previous year. Consequently, stock transaction tax revenues fell to NT$21.9 billion in March, marking a 24.6 percent decline and the steepest drop in 26 months.