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Taiwan forex reserves hit new high for 6th straight month.

Taiwan's foreign exchange reserves at the end of April hit a new high for the sixth consecutive month, mainly on the back of an increase in returns from the central bank's investment portfolio, it said Tuesday.

However, the weakness of the euro against the U.S. dollar offset the investment gains in its portfolio, the bank said.

Central bank data showed Taiwan's forex reserves as of the end of April at US$464.83 billion, up US$750 million from March when the monthly increase was US$143 million.

Harry Yen, head of the central bank's Foreign Exchange Department, told the press that the euro depreciated against the U.S. dollar by 0.4 percent in April, which cut back the returns in the central bank's portfolio management to some extent.

The holdings of Taiwanese stocks, bonds and Taiwan dollar-denominated deposits by foreign investors totaled US$385.9 billion at the end of April, an increase of US$5.1 billion from the previous month.

As a result, foreign-held assets at the end of April were equivalent to about 83 percent of Taiwan's foreign exchange reserves, up from 80 percent in March, the central bank data showed.

The increase in foreign-held assets mainly reflected a fund inflow resulting from buying by foreign institutional investors in local shares in April, the central bank said.

Financial Supervisory Commission statistics showed that fund inflows from foreign institutional investors was about US$3.76 billion in April.

In April, the weighted index on the Taiwan Stock Exchange rose 326.69 points, or 3.07 percent, from a month earlier as foreign institutional investors bought a net NT$54.45 billion (US$1.76 billion) worth of shares on the main board.

In turn, the gains in local equities 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$3.99 trillion, Japan's US$1.23 trillion, Switzerland's US$759.6 billion and Saudi Arabia's US$489 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.

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Publication:Taiwan News (Taipei, Taiwan)
Geographic Code:9TAIW
Date:May 7, 2019
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