China News Service, July 6. According to Taiwan's "Business Times" report, the Taiwan authorities' monetary policy authority announced that the foreign exchange reserves in June were US$548.963 billion, a monthly increase of US$109 million, the second consecutive month of increase.
Cai Jiongmin, head of the foreign exchange department of the Taiwan authority's monetary policy authority, said that the change was mainly due to the depreciation of the euro and other currencies against the US dollar, which decreased after being converted into US dollars, and the higher return on investment and utilization of foreign exchange deposits.
The international dollar index soared above 105 to a 20-year high in June, rising 3.05% in the month, causing major non-US currencies to depreciate.
Cai Jiongmin pointed out that among the major non-US currencies in the month, the euro fell by 2.79%, the Japanese yen fell by 6.22%, the British pound fell by 3.87%, the Australian dollar fell sharply by 4.11%, the Canadian dollar fell by 1.67%, and the RMB fell by 0.31%. Therefore, although the investment and utilization of foreign exchange reserves is not a "big month", it is not much, and the foreign exchange reserves still increase slightly.
At the end of June, foreign holdings of stocks and bonds on the island were calculated at the market price of the day, together with their NTD deposit balance of US$529.3 billion, which fell below US$600 billion in one fell swoop, and dropped by US$99.7 billion in a single month, making the equivalent foreign exchange reserve ratio exceeded 100% to 96%.
Statistics from the monetary policy authority of the Taiwan authorities show that the data exceeded 100% for the first time in July 2020, and it has continued to rise since 2021, reaching a record high of 138% in December, but after April 2022, foreign sales exceeded Taiwan The remittance of stocks caused Taiwan stocks to plummet. In April and May, the equivalent ratio fell to 111% and 115%, and in June, it fell further below 100% to 96%.
Cai Jiongmin explained that foreign capital actually did not go out that much in June. The amount of remittance together with principal and surplus was about US$5.189 billion, which was lower than the US$12 billion and US$8 billion in March and April. The remittance bought super Taiwan stocks, so it turned into a remittance of US$1 billion that month.
Although the monetary policy authority of the other Taiwan authorities made a slight adjustment in June, the trading of foreign exchange contracts was balanced and did not affect the changes in foreign exchange reserves, unlike the obvious situation of foreign exchange sales in March and April.
In the second half of the year, the global stock market will continue to follow the trend of the US stock market. Cai Jiongmin emphasized that the current market view is pessimistic. Because of the high inflation in the United States, the Federal Reserve continues to raise interest rates. It is estimated that there will be 6 to 7 interest rate hikes after July. The fund rate will be 3% to 3.25% by the end of the year, or even 3.25% to 3.5%, which is not conducive to the performance of US stocks. Major Asian stock markets including Taiwan stocks will be negatively affected.