The nation’s foreign exchange reserves last month grew US$1.97 billion to a record US$564.83 billion, as its assets denominated in European currencies gained value, the central bank said yesterday.
The US dollar index shed 1.36 percent in last month, while the euro advanced 1.63 percent, the British pound increased 1.87 percent, the Canadian dollar grew 2.94 percent and the Australian dollar rose 2.05 percent, Department of Foreign Exchange Director-General Eugene Tsai (蔡炯民) told in an online news conference.
The changes in value came after the US Federal Reserve kept its policy rate unchanged and other advanced countries raised interest rates to tame inflation, Tsai said.
Photo: AFP
By contrast, Asian currencies weakened against the US dollar, with the yuan losing 1.96 percent, the yen declining 3.44 percent, and the New Taiwan dollar depreciated 1.22 percent, Tsai said.
The central banks in Taiwan and Japan opted to maintain their monetary policy and China loosened lending terms a bit to support its economy, Tsai said.
Foreign fund flows played a neutral role after remitting US$3.43 billion of capital and wiring over US$3 billion of profit abroad, Tsai said.
The central bank largely refrained from intervention this year to help stabilize the foreign exchange market, except for a few times when it spotted abnormal massive fund movements, the official said.
As of Tuesday, the local currency dropped 1.31 percent against the US dollar, staying within a “stable” range, Tsai said.
The fund movements likely had to do with market expectations that the Fed would raise interest rates through September, in a continued bid to fight inflation, Tsai said.
Tsai declined to comment on the Fed’s potential moves except to say that the financial markets have reached the consensus that it would not cut interest rate this year and economic data would guide its policy decisions.
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