Taipei: Taiwan's foreign exchange reserves have once again exceeded the US$600 billion mark by the end of April, as the central bank took measures to prevent the rapid appreciation of the Taiwan dollar against the U.S. dollar.

According to Focus Taiwan, data from the central bank revealed that the country's forex reserves reached US$602.49 billion at the end of April, an increase of approximately US$5.60 billion from US$596.89 billion at the end of March. Tsai Chiung-min, head of the Foreign Exchange Department, explained that the local market's robust performance encouraged foreign institutional investors to inject funds into Taiwan, exerting downward pressure on the U.S. dollar throughout April.

To manage volatility in the forex market, Tsai stated that the central bank intervened by purchasing the U.S. dollar to limit the Taiwan dollar's appreciation, subsequently boosting the forex reserves' value. Over April, the Taiwan dollar climbed by 1.05 percent against the U.S. dollar. With the weaker U.S. dollar, the conversion of non-greenback denominated assets in the portfolio into American currency led to an increase in the forex reserves' value.

The central bank noted that among significant non-greenback currencies, the British pound increased by 2.08 percent against the U.S. dollar, while the euro rose by 1.72 percent. Additionally, enhanced returns from the central bank's portfolio management contributed to the growth of forex reserves in April. At the same time, the data showed that foreign investors held US$1.61 trillion in Taiwan-listed stocks, bonds, and Taiwan dollar deposits at the end of April, rising from US$1.26 trillion in March.

These holdings represented 268 percent of Taiwan's total forex reserves in April, driven by the local main board's performance, which saw the Taiwan Stock Exchange's benchmark Taiex climb 22.71 percent due to large-cap tech stocks and optimism regarding AI development. Statistics from the Financial Supervisory Commission indicated that foreign institutional investors recorded a monthly high of US$26.4 billion in net fund inflows into Taiwan in April.

The local central bank has affirmed its commitment to maintaining ample forex reserves to ensure the stability of domestic financial markets and to protect against any sudden fund movements out of Taiwan by foreign institutional investors.