Taiwan’s foreign exchange reserves last month declined by US$1.56 billion to US$571.74 billion, ending two months of gains, due to an outflow of foreign capital, the central bank said yesterday.
The retreat also had to do with the monetary policymaker’s intervention in the foreign exchange market, which was aimed at slowing the local currency’s depreciation against the US dollar, Department of Foreign Exchange Director-General Eugene Tsai (蔡炯民) told an online news conference.
The New Taiwan dollar lost 1.13 percent against the greenback as foreign portfolio managers wired cash dividends and capital gains abroad, Tsai said.
Photo: CNA
Foreign stock players collected US$4 billion to US$5 billion in cash dividends and an unspecified amount of capital gains from the local bourse, which repeatedly rallied to record highs in the first half of last month, he said.
Capital outflows totaled US$12 billion, Tsai added.
Major reserve currencies also devalued against the US dollar: the Euro dropped 1.21 percent, the Canadian dollar declined 0.9 percent and the Australian dollar decreased 1.96 percent, Tsai said.
Japan’s yen and China’s yuan bucked the downturn, advancing 4.76 percent and 0.68 percent respectively, Tsai said.
Taiwan ranked the world’s fifth largest holder of foreign reserves after China, Japan, Switzerland and India, he said.
The NT dollar’s momentum is likely shifting, as the US Federal Reserve (Fed) is widely expected to lower interest rates next month, after the US economy recently showed signs of weakness and inflation has become muted, Tsai said.
Moving forward, the Fed would assign more importance to economic health after the latest US employment data disappointed and corporate earnings produced mixed results, Tsai said, adding that a hard landing is unlikely for the US economy.
The US presidential election poses further uncertainty, he added.
The NT dollar yesterday rose 0.5 percent, or NT$0.178, against the greenback, although the TAIEX plunged by an unprecedented 8.35 percent, or 1,807.21 points, to 19,830.88.
Chinese technology giants including Huawei Technologies Co (華為) and Baidu Inc (百度) as well as start-ups are stockpiling high bandwidth memory (HBM) semiconductors from Samsung Electronics Co in anticipation of US curbs on exports of the chips to China, three sources said. The companies have ramped up their buying of the artificial intelligence (AI) capable semiconductors since early this year, helping China account for about 30 percent of Samsung’s HBM chip revenue in the first half of this year, one of the sources said. US authorities are planning to unveil an export-control package this month that would impose new restrictions on shipments
A boom: The airlines saw a rise in international flights and demand for cargo services, with the latter attributed to AI needs and vendors opting to have items delivered by air China Airlines Ltd (CAL, 中華航空) and EVA Airways Corp (長榮航空) have reported their highest-ever net profit for the first half of the year amid a boom in international travel and growing demand for cargo services. The global airline industry’s momentum from last year extended into the first six months of this year. That momentum along with an increase in the number of flights supported passenger revenue growth, the two airlines said on Friday. CAL’s net profit in the first six months of this year hit a new high of NT$7.14 billion (US$220 million), resulting in earnings per share of NT$1.08, the airline
Hong Kong carrier Cathay Pacific Airways Ltd (國泰航空) yesterday said that it would buy at least 30 Airbus SE A330-900 aircraft in a deal valued at US$11 billion as it looks to build on a post-COVID-19 recovery and reach pre-pandemic passenger numbers next year. The firm made the announcement as it reported a drop in profit in the first half of the year, having moved into the black for the first time in four years last year thanks to a pickup in post-pandemic demand. Cathay did not disclose the total price of the planes, but said it had received “significant price concessions”
AHEAD OF SCHEDULE: The company expects revenue from the sale of servers to increase fivefold this year from 2022, rather than in 2027 as it forecast previously PC vendor Asustek Computer Inc (華碩) yesterday posted its strongest profit in 10 quarters for the second quarter, thanks to robust sales of PCs and servers, as well as greater royalty income. Net profit soared 117 percent quarter-on-quarter and 356 percent year-on-year to NT$11.8 billion (US$361 million) during the quarter ending June 30, compared with NT$5.45 billion in the first quarter and NT$2.59 billion in the second quarter last year. Earnings per share jumped to NT$15.9 from NT$7.3 the previous quarter and NT$3.5 a year earlier. Nonoperating profit last quarter totaled NT$4 billion, including NT$1 billion of royalty income from licensing its 3G,