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Taiwan's Central Bank Confirms June Intervention in Forex Market
Summary
Taiwan's central bank has confirmed it intervened in the foreign exchange market in June, a move that contributed to a decline in the country's foreign exchange reserves to $597.15 billion.
Taiwan’s central bank announced it intervened in the foreign exchange market in June, according to a statement from the monetary authority. The country's foreign exchange reserves fell to $597.15 billion by the end of the month. The bank cited investment gains, intervention activities, and exchange rate fluctuations against the U.S. dollar as factors affecting the reserve levels.
Eugene Tsai, head of the central bank’s foreign exchange department, stated at a briefing in Taipei that the decline in reserves was a result of the bank's net selling of foreign currency in June. He also pointed to a significant depreciation of non-U.S. currencies as a contributing factor.
According to Tsai, the market's perception of the U.S. Federal Open Market Committee’s June meeting as relatively hawkish led to a strengthening of the dollar. This, in turn, affected foreign exchange selling prices in the market. For the first quarter, the central bank’s net foreign exchange sales totaled $12.593 billion.
AdLooking ahead, Tsai suggested that the Federal Reserve will likely keep interest rates unchanged in September, citing easing inflation and a more moderate U.S. labor market. He added that if the U.S. dollar's strength moderates, market participants may become more willing to sell foreign currency.