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.
Semiconductor shares in China surged yesterday after Reuters reported the US had ordered chipmaking giant Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) to halt shipments of advanced chips to Chinese customers, which investors believe could accelerate Beijing’s self-reliance efforts. TSMC yesterday started to suspend shipments of certain sophisticated chips to some Chinese clients after receiving a letter from the US Department of Commerce imposing export restrictions on those products, Reuters reported on Sunday, citing an unnamed source. The US imposed export restrictions on TSMC’s 7-nanometer or more advanced designs, Reuters reported. Investors figured that would encourage authorities to support China’s industry and bought shares
TECH WAR CONTINUES: The suspension of TSMC AI chips and GPUs would be a heavy blow to China’s chip designers and would affect its competitive edge Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s biggest contract chipmaker, is reportedly to halt supply of artificial intelligence (AI) chips and graphics processing units (GPUs) made on 7-nanometer or more advanced process technologies from next week in order to comply with US Department of Commerce rules. TSMC has sent e-mails to its Chinese AI customers, informing them about the suspension starting on Monday, Chinese online news outlet Ijiwei.com (愛集微) reported yesterday. The US Department of Commerce has not formally unveiled further semiconductor measures against China yet. “TSMC does not comment on market rumors. TSMC is a law-abiding company and we are
FLEXIBLE: Taiwan can develop its own ground station equipment, and has highly competitive manufacturers and suppliers with diversified production, the MOEA said The Ministry of Economic Affairs (MOEA) yesterday disputed reports that suppliers to US-based Space Exploration Technologies Corp (SpaceX) had been asked to move production out of Taiwan. Reuters had reported on Tuesday last week that Elon Musk-owned SpaceX had asked their manufacturers to produce outside of Taiwan given geopolitical risks and that at least one Taiwanese supplier had been pushed to relocate production to Vietnam. SpaceX’s requests place a renewed focus on the contentious relationship Musk has had with Taiwan, especially after he said last year that Taiwan is an “integral part” of China, sparking sharp criticism from Taiwanese authorities. The ministry said
US President Joe Biden’s administration is racing to complete CHIPS and Science Act agreements with companies such as Intel Corp and Samsung Electronics Co, aiming to shore up one of its signature initiatives before US president-elect Donald Trump enters the White House. The US Department of Commerce has allocated more than 90 percent of the US$39 billion in grants under the act, a landmark law enacted in 2022 designed to rebuild the domestic chip industry. However, the agency has only announced one binding agreement so far. The next two months would prove critical for more than 20 companies still in the process
RSS