Foreign exchange reserves hit record high US$566.49bnASSET ALLOCATION: US government bonds remain the safest asset, despite the US’ credit rating being downgraded by Fitch Ratings, an official saidBy Crystal Hsu / Staff reporterThe nation’s foreign exchange reserves last month grew US$1.66 billion to a new high of US$566.49 billion, helped by value gains in major reserve currencies other than the US dollar, the central bank said yesterday. It was the ninth consecutive month foreign exchange reserves increased, even though the New Taiwan dollar lost 1.04 percent against the greenback after foreign portfolio managers cut their holdings in local shares and wired cash dividends to their home nations, Department of Foreign Exchange Director-General Eugene Tsai (蔡炯民) told a news conference. The currency movements were due to the dividend season last month and this month, Tsai said, adding that foreign institutional investors wired about US$7 billion abroad last month. Tsai said US government bonds remain the safest asset with the best liquidity, despite the US’ credit rating being downgraded by Fitch Ratings. The downgrade would have little impact on the central bank’s asset allocation, as it would buy US government debt to better utilize the nation’s foreign exchange reserves, Tsai said.

Source: Taipei Times August 04, 2023 18:38 UTC