Taipei, Taiwan's foreign exchange reserves hit a new high at the end of February for the 11th consecutive month, largely on increased returns from the central bank's management of the funds, the bank said.
The returns, however, were limited to some extent by a 1.7 percent depreciation of the euro against the U.S. dollar, the bank said.
As of the end of February, Taiwan's forex reserves were US$456.72 billion, an increase of US$997 million from a month earlier, central bank data showed.
Harry Yen (???), head of the central bank's Foreign Exchange Department, said that a technical rebound of the U.S. dollar index, which tracks the currencies of the U.S.' six major trading partners, sent non-greenback currencies lower in February.
Despite a 0.27 percent decline of the Taiwan dollar, demand for the local currency ahead of the Lunar New Year holiday prompted many exporters to raise their holdings in the Taiwan unit, which in turn offset the outflows of foreign funds and propped up the forex reserves in February, Yen said.
At the end of February, holdings of Taiwanese stocks, bonds and Taiwan dollar-denominated deposits by foreign investors were down US$16.9 billion from a month earlier at US$409.2 billion, the central bank said.
The foreign-held assets were equivalent to about 90 percent of Taiwan's foreign reserves at the end of February, down from the record 94 percent at the end of January, the central bank said.
Yen said the decline in foreign-held assets reflected a weaker local equity market in February, when the weighted index on the Taiwan Stock Exchange fell 2.6 percent and foreign institutional investors sold a net US$3.49 billion worth of local shares amid volatility on Wall Street.
The central bank 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.
Source: Focus Taiwan News Channel