Taipei: Taiwan's central bank has adopted dynamic adjustments in its portfolio management of the country's foreign exchange reserves, aiming to reduce potential risks arising from fluctuations in U.S. Treasury bonds, Central Bank Governor Yang Chin-long stated.
According to Focus Taiwan, Yang made the statement during a hearing of the Legislative Yuan's finance committee. This came in response to inquiries concerning reports that Danish pension operator AkademikerPension was planning to divest US$100 million worth of U.S. Treasuries, amid concerns over U.S. President Donald Trump's intentions to control Greenland. Lawmakers noted the growing volatility in U.S. Treasuries amid increasing global efforts to decouple from the United States, raising concerns about the stability of Taiwan's foreign reserves.
Taiwan is currently the 10th largest holder of U.S. Treasury bonds. Kuomintang (KMT) Legislator Wang Hung-wei questioned whether Taiwan's central bank would reduce its positions in U.S. government bonds or adjust its portfolio of foreign exchange reserves to mitigate risks. Yang assured that the central bank plans to lower risks by cutting or adjusting its U.S. Treasury bond positions.
As of the end of 2025, Taiwan's foreign exchange reserves stood at US$602.55 billion, marking its second-highest level ever recorded. During the legislative hearing, Yang addressed concerns raised by the International Monetary Fund (IMF) over Taiwan's exposure to U.S. dollar-denominated assets. The IMF reported that Taiwan's exposure was 45 times the size of its forex market, compared to South Korea's 25 times exposure. However, Yang argued that the central bank's estimate indicates an exposure of only 20 times the size of Taiwan's forex market.
Yang expressed confidence in Taiwan's market stability, noting that some of the IMF's past forecasts on Taiwan's economic growth were not accurate. Despite Taiwan agreeing to provide US$250 billion in credit guarantees for financial institutions to invest in the U.S. market in a recent trade deal, Yang emphasized that there is still adequate foreign currency-denominated capital in the domestic market, eliminating the immediate need to use forex reserves as credit guarantees.
Taiwan's surplus savings, as estimated by the central bank, amount to NT$5.42 trillion (US$172 billion), which is sufficient to support overseas investments by Taiwanese enterprises.