Foreign Exchange Reserves as at the End of October 2010
PRESS RELEASE Release Date: November 5, 2010
Foreign Exchange Reserves as at the End of
October 2010
The foreign exchange reserves of the Republic of China amounted to US$383.84 billion at the end of October 2010, showing an increase of US$3.33 billion from the figure recorded at the end of the previous month.
The main factors responsible for the increase in foreign exchange reserves in October 2010 are：
1. The EUR and other major currencies appreciated against the US dollar. Foreign exchange reserves denominated in these currencies were worth more in terms of the base currency, the US dollar.
2. Returns from foreign exchange reserves management.
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When the September figure was released on October 5, we explained that the main factors responsible for the increase in foreign exchange reserves were exchange rate movements and interest income received. Regrettably, some commentators insisted on attributing the increase to foreign currency purchases made by the central bank. Their interpretation of the published number is misguided.
During the month of September 2010 the euro appreciated against the US dollar by 7.5%. Other major international currencies also rose substantially against the dollar, causing the value of reserve assets denominated in these currencies to rise noticeably in dollar terms. The table below shows that foreign exchange reserves reported by many countries also increased considerably in September.
We very much hope that those who wish to comment on the change in the level of our foreign exchange reserves will do so objectively and judiciously.
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The NT dollar exchange rate is, in principle, determined by market forces. The central bank will only step in to maintain order in the foreign exchange market when irregular or seasonal factors (such as massive flows of short-term capital) produce excessive exchange rate volatility that undermines economic and financial stability.
Note: The next dissemination will be made at 16:20 p.m. on December 3, 2010;
the advance release calendar can be accessed on our website at:
http://www.cbc.gov.tw/ct.asp?xItem=30164&ctNode=515&mp=2