Taiwan has about 422 tonnes of gold in reserve, held by the central bank to support the value of the national currency, a central bank official said yesterday.
Of that amount, 410 tonnes is retained as an asset for the issuance of New Taiwan dollars, the official added.
The remaining reserve is utilized, normally once every four years, to mint commemorative gold coins for the inauguration of Taiwan’s newly elected president and vice president, the official said.
Photo: Bloomberg
Taiwan was 12th in the World Gold Council’s latest rankings of global gold reserves in the first quarter. The top three countries were the US, Germany and Italy.
Based on NT dollar banknotes already in circulation, the central bank said it has the equivalent amount in liquid assets, currently in the form of gold and foreign exchange reserves.
The purpose is to support and guarantee the value of the national currency, as gold has always played an important role in the international monetary system, it added.
Gold reserves serve as a key risk management tool for countries in times of crisis, as they provide a buffer against unforeseen events such as war and financial instability, it said.
Although gold prices have skyrocketed in recent years, the central bank said it is neither adding to nor selling its gold reserve.
Most of the gold the central bank holds was purchased in the 1970s to balance the trade surplus between Taiwan and the US, it said.
During that period, gold was valued at less than US$400 per ounce and has since soared to US$2,450 per ounce. With a weakening NT dollar, the country’s unrealized gain has reached nearly NT$900 billion (US$27.87 billion).
An unrealized gain or loss is the change in the value of a stock, bond or other asset that was purchased, but has not yet been sold.
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