TAIPEI (Reuters) – U.S. government debt is “reasonable” and is still favored by investors and does not have to worry about the dollar’s position as a leading international reserve currency, Tyvan said on Sunday.
U.S. President Donald Trump issued a tariff announcement on April 2, causing markets to collapse, including U.S. Treasury bonds, and expressed doubts about the security status of the dollar.
Trump’s complaint against a strong dollar has also sparked speculation that Washington wants to make adjustments in the U.S. currency.
According to the island’s central bank, Taiwan’s $582.8 billion foreign exchange reserves are composed of more than 80% of U.S. fiscal bonds.
The central bank responded to what it said was the market’s concern about U.S. bonds and the dollar, saying on its website that there was no alert.
“The US dollar’s status as a leading international reserve currency remains unfavorable,” it said. “The US’s public debt is stable and has good liquidity, and its function as a store of value is still favored by investors.”
The central bank also called on media and market commentators not to speculate on foreign exchange rates, as Taiwan’s surge in the dollar has been speculated to have the influx of U.S. currencies as part of tariff negotiations.
The central bank has repeatedly denied that the United States has made this request.
In a statement on Sunday, the central bank said its inspection team found that some unnamed foreign investors ostensibly transferred large sums to Taiwanese dollar deposit accounts to invest in Taiwanese stocks.
However, if they declared the money “rather than using the money to speculate on the exchange rate of the Taiwanese dollar,” it said, there was no such investment.
(Reported by Ben Blanchard and Liang-sa Loh. Editor of Jane Merriman)
