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Taiwan's foreign reserves decline to $106.742 bil. in Dec

Asian Economic News, Jan 15, 2001

TAIPEI, Jan. 8 Kyodo

Taiwan's foreign reserves markedly shrank in December, totaling $106.742 billion at the end of the month, down $1.489 billion from the previous month, Taiwan's Central Bank of China said Monday.

The decrease was caused mainly by strong domestic demand for the U.S. dollar given the weakening of the local currency and foreign investors' pullout from the local stock market, Central Bank of China officials said.

Due to the local currency's depreciation and higher U.S. interest rates on bank deposits, many people have been switching their savings into U.S. dollars, while the central bank used the U.S. currency to prop up the N.T. dollar, bank officials said.

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Taiwan's foreign currency cache has now been on the decline for six months in a row from an all-time high of $113.83 billion last June.

Taiwan, however, still ranks third worldwide behind Japan and China in foreign currency reserves.

But fourth-ranked Hong Kong, whose foreign reserves are only a few billion dollars short of Taiwan's, could soon claim third place if Taiwan's foreign reserves cache continues to shrink.

On a year-on-year basis the island's foreign reserves increased by $542 million.

Taiwan's foreign reserves decline to $106.742 bil. in Dec

Asian Economic News, Jan 15, 2001

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