Taiwan’s foreign exchange reserves last month fell by US$1.06 billion to US$569.54 billion from the previous month, ending two straight months of sequential gains, as the US dollar rose and eroded the value of other reserve currencies, the central bank said yesterday.
In addition, the central bank intervened in the local market last month to shore up the local currency, which weighed on overall foreign exchange reserves, Department of Foreign Exchange Director-General Eugene Tsai (蔡炯民) said during a news conference in Taipei.
It is not uncommon for the central bank to step in when it sees it necessary to slow excessive fund flows and stabilize the foreign exchange market, Tsai said.
Photo: Reuters
Global funds late last month bought greenback-denominated assets on the expectation that the US Federal Reserve would keep interest rates at high levels, rather than start to lower interest rates as early as next month, Tsai said.
As a result, the US dollar index grew 1.94 percent, while the Japanese yen lost 4.23 percent, the Chinese yuan weakened 1.24 percent and the New Taiwan dollar softened 1.64 percent, he said.
The market is now looking at the Fed’s interest rate cuts beginning in May at the earliest, Tsai said.
The view gained force after recent US GDP and employment data turned out stronger than expected and Fed Chairman Jerome Powell last week called for patience with high interest rates following a rate-setting Federal Open Market Committee meeting, he said.
Though the Financial Supervisory Commission saw fund inflows of more than US$3 billion to the local bourse last month, marking the third consecutive month of net fund inflows, the central bank observed foreign funds wiring profits of a similar size abroad, suggesting a balance in supply and demand, Tsai said.
Tsai linked the foreign fund outflow to a cash dividend distribution on the part of Taiwan Semiconductor Manufacturing Co (台積電), the world’s largest contract chipmaker.
Foreign portfolio managers repeatedly cut and raised holdings in local shares last month and so far this month, in keeping with their ever-changing views on the Fed’s policy intentions, he said.
Despite the retreat in foreign exchange reserves last month, Taiwan holds the world’s fourth-largest foreign exchange reserves after China, Japan and Switzerland, Tsai said.
The central bank would maintain ample foreign exchange reserves to ensure stability in local financial markets and guard against any sudden fund outflows by foreign investors, he added.
Nvidia Corp’s demand for advanced packaging from Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) remains strong though the kind of technology it needs is changing, Nvidia CEO Jensen Huang (黃仁勳) said yesterday, after he was asked whether the company was cutting orders. Nvidia’s most advanced artificial intelligence (AI) chip, Blackwell, consists of multiple chips glued together using a complex chip-on-wafer-on-substrate (CoWoS) advanced packaging technology offered by TSMC, Nvidia’s main contract chipmaker. “As we move into Blackwell, we will use largely CoWoS-L. Of course, we’re still manufacturing Hopper, and Hopper will use CowoS-S. We will also transition the CoWoS-S capacity to CoWos-L,” Huang said
Nvidia Corp CEO Jensen Huang (黃仁勳) is expected to miss the inauguration of US president-elect Donald Trump on Monday, bucking a trend among high-profile US technology leaders. Huang is visiting East Asia this week, as he typically does around the time of the Lunar New Year, a person familiar with the situation said. He has never previously attended a US presidential inauguration, said the person, who asked not to be identified, because the plans have not been announced. That makes Nvidia an exception among the most valuable technology companies, most of which are sending cofounders or CEOs to the event. That includes
TARIFF TRADE-OFF: Machinery exports to China dropped after Beijing ended its tariff reductions in June, while potential new tariffs fueled ‘front-loaded’ orders to the US The nation’s machinery exports to the US amounted to US$7.19 billion last year, surpassing the US$6.86 billion to China to become the largest export destination for the local machinery industry, the Taiwan Association of Machinery Industry (TAMI, 台灣機械公會) said in a report on Jan. 10. It came as some manufacturers brought forward or “front-loaded” US-bound shipments as required by customers ahead of potential tariffs imposed by the new US administration, the association said. During his campaign, US president-elect Donald Trump threatened tariffs of as high as 60 percent on Chinese goods and 10 percent to 20 percent on imports from other countries.
INDUSTRY LEADER: TSMC aims to continue outperforming the industry’s growth and makes 2025 another strong growth year, chairman and CEO C.C. Wei says Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), a major chip supplier to Nvidia Corp and Apple Inc, yesterday said it aims to grow revenue by about 25 percent this year, driven by robust demand for artificial intelligence (AI) chips. That means TSMC would continue to outpace the foundry industry’s 10 percent annual growth this year based on the chipmaker’s estimate. The chipmaker expects revenue from AI-related chips to double this year, extending a three-fold increase last year. The growth would quicken over the next five years at a compound annual growth rate of 45 percent, fueled by strong demand for the high-performance computing
RSS