Reporter Chen Meiying/Special report
This week, the Ministry of Finance will release import and export statistics for September. Driven by AI demand, exports in September are estimated to have increased by more than 40% year-on-year, with 35 reds in a row, which will be the longest red record in history. The Central Bank will release the balance of foreign exchange reserves in September. It is expected that as the Federal Reserve raises interest rates and the US dollar strengthens, the balance of foreign exchange reserves will decrease and face a battle to defend US$600 billion.
The central bank predicts that due to the strengthening of the U.S. dollar and foreign exchange selling, foreign exchange reserves in September will end the surge in August and decline. (European News Agency)
According to statistics from the Ministry of Finance, Taiwan's exports in August reached a record high of US$82.4 billion in a single month, with a monthly increase of 9.4% and an annual increase of 41%. It has been growing for 34 consecutive months, tying the longest record in history.
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As for the export performance in August that was better than originally expected, the Ministry of Finance stated that it had underestimated the powerful power of AI. The cumulative exports in the first eight months reached US$574.34 billion, an annual increase of 44.2%, and the export scale also set a new record for the same period in previous years.
The Ministry of Finance estimates that exports in September will fall to US$77 billion to US$80.3 billion, with an annual growth rate of about 42% to 48%. If the prediction comes true, exports in September will be the second to fourth highest level in a single month in history.
The Ministry of Finance stated that the demand for emerging technologies such as AI, high-performance computing and cloud services is still the main support for exports. In addition, Taiwan manufacturers occupy a key position in the global semiconductor and server supply chain, as well as the launch of new international brand products in the second half of the year and the peak holiday season at the end of the year. Exports are expected to continue until the end of the year.
As the U.S. dollar strengthens and hot money is remitted out, the forecast for foreign exchange reserves in September falls
The central bank will announce the bottom line of foreign exchange reserves in September, which may be affected by the strengthening of the U.S. dollar.
According to data from the central bank, the balance of foreign exchange deposits at the end of August was US$601.904 billion, a monthly increase of US$7.633 billion, ending two consecutive declines, and the monthly increase hit a new high since May last year. The central bank said that it was mainly due to three major factors: income from investment and utilization of foreign exchange deposits, the decline of the US dollar, and the central bank's entry adjustments. Among them, August is a big month for the yield of foreign exchange deposits. In addition, the large-scale inflow of foreign capital and the central bank's entry into the market to purchase foreign exchange were the main reasons for the increase in foreign exchange deposits.
After entering September, the market trend changed again. The Federal Reserve (Fed) started to raise interest rates in September, which led to the strengthening of the US dollar index and pressure on non-US currencies. In addition, foreign investors turned to overselling and remitted hot money in September, causing the New Taiwan dollar to depreciate. Foreign exchange reserves held in foreign currency positions were converted into US dollars. The central bank also entered the market to sell foreign exchange to stabilize the foreign exchange market. It is expected that the foreign exchange reserves will decrease in September.
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