align="left">Foreign Exchange Reserves as of the End of January 2018

The foreign exchange reserves of the Republic of China amounted to US$455.72 billion as of the end of January 2018, showing an increase of US$4.22 billion from the figure recorded at the end of the previous month.

The factors responsible for the increase in the foreign exchange reserves in January 2018 are:

1.  The appreciation of the euro and other reserve currencies 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.

3.  Net foreign capital inflows.

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Note:

1. The market value of securities investment and the NTD deposits held by foreign portfolio investors at the end of January 2018 reached US$426.1 billion, equivalent to 94% of foreign exchange reserves.

2. With regard to the capital flows statistics on foreign portfolio investments in Taiwan, the Financial Supervisory Commission (FSC) takes an asset-based approach (counting investment capital, conversion of ECB, redemption of GDR, and foreign shareholders’ initial stockholdings in the inward remittance, while excluding outward remittance of earnings), which is different from the CBC’s cash flow-based approach (only actual cash flows of inwards/outwards remittances are counted).

A breakdown of the discrepancy between the FSC and the CBC’s statistics, which amounted to US$ 694 million in January 2018, is shown below:

3. Furthermore, net position on centralized securities exchange markets of foreign investors does not fully represent foreign investors’ net inward remittance.

For example, when buying stocks, foreign investors shall make inward remittances immediately to fulfill the obligation for stock settlements; however, when selling stocks, foreign investors may not make outward remittances right after the stock deliveries since they may consider investing in other securities.

In addition, domestic securities that foreign investors may invest in include not only listed stocks, but also bonds, money market instruments, and Exchange Traded Funds (ETF) subscribed through the primary market.

The next dissemination will be made at 16:20 on March 5, 2018;

the advance release calendar can be accessed on our website at: http://www.cbc.gov.tw/np.asp?ctNode=305&mp=1