Taiwan's Forex Reserves Again Hit Record High of US$416.9B. in January 2014

Taiwan's foreign exchange reserves slightly increased by US$124 million from a month earlier to again hit a record high of US$416.935 billion in January, making Taiwan remain the world's fourth largest forex reserves holder, next to China, Japan and Russia, according to the central bank.

In January Taiwan witnessed net inflow of over US$800 million in foreign funds, yet in the same month the euro depreciated by 0.89% against the U.S. dollar and some other foreign currencies also devalued against the greenback, hence suppressing the rise of Taiwan's forex reserves for the month.

As of the end of January, the outstanding value of Taiwan's stock, bonds and NT-dollar deposits held by foreigners reached US$243.9 billion, accounting for 59% of the total forex reserves.

H.H. Yen, deputy director general at Foreign Exchange Dept. of the central bank, indicates that some emerging markets in Asia such as India and Turkey unexpectedly raised their interest rates due to anxiety about possible massive inflow of foreign capital resulting from the likely tapering of  U.S. QE policy.

Unlike the said countries, Yen says, Taiwan's financial market is quite stable and will be little influenced by the U.S. decision.

In January India and Russia both experienced a decline in forex reserves; while South Korea posted a monthly rise of US$1.93 billion to US$348.4 billion in forex reserves. As for  China, its forex reserves showed a quarterly increase of US$158.6 billion to US$3.82 trillion as of the end of December 2013 and enjoyed an annual growth of US$509.7 billion for the year. (JL)