Taiwan's foreign exchange reserves at the end of 2017 kept hitting a new high after returns on funds managed by the central bank increased from a month earlier, the bank's data showed Friday.
In addition, the appreciation of the euro, which is part of the central bank's portfolio in managing its forex reserves, also contributed to the growth in the month, the central bank's data indicated.
At the end of December, the country's forex reserves totaled US$451.5 billion, up US$1.03 billion from the end of November.
It was the ninth consecutive month for Taiwan to report a record high in forex reserves, the central bank's data showed.
For the entire year of 2017, Taiwan's forex reserves rose US$17.3 billion from the end of 2016, marking the highest annual growth in value in five years, the central bank said.
Harry Yen (???), head of the central bank's Foreign Exchange Department, said the bank raked in higher investment returns from its assets management in December, which remained a driver of the higher forex reserves.
Moreover, Yen said, a rising euro against the U.S. dollar helped Taiwan boost its forex reserve value at the end of December when euro-denominated assets were converted into U.S. dollars in the bank's portfolio.
In 2017, the euro rose 13.7 percent against the U.S. dollar, making itself the major factor in pushing up Taiwan's forex reserves for the whole year, according to the central bank.
As of the end of December, holdings of Taiwanese stocks, bonds and Taiwan dollar-denominated deposits by foreign investors fell US$200 million from a month earlier to US$391.6 billion, the central bank said.
The decline in assets owned by foreign investors came after foreign institutional investors stood on the selling side in the local equity market to lock in their earlier profits and wrote the gains into their books with the year of 2017 coming to an end.
According to the Taiwan Stock Exchange, foreign institutional investors sold a net NT$34.03 billion (US$1.15 billion) worth of shares on the main board in December.
Despite the decline, foreign-held assets were equivalent to about 87 percent of Taiwan's foreign reserves, with the ratio little changed from a month earlier.
The central bank is determined to maintain sufficient forex reserves by raising investment returns, a way to guarantee secure local financial markets even if foreign institutional investors scramble to move funds out of the country.
Taiwan ranked fourth globally in terms of forex reserves value, behind China's US$3.119 trillion at the end of November, Japan's US$1.199 trillion at the end of November, and Switzerland's US$749.8 billion.
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