Today (2nd), the New Taiwan Dollar surged nearly 9 cents in the market, with the central bank emphasizing that this appreciation was not forced by the US. However, at the same time, dollar holdings have been cut by almost $10 billion, marking a five-year low.

According to the latest statistics, the Central Bank of Taiwan's dollar assets shrank nearly $10 billion in the first quarter, dropping below the $70 billion threshold and setting a record low.

Recent data shows that the bank's foreign exchange reserves in dollar assets are now at $66.4 billion, which is a decrease of $8.4 billion or 11% from the previous quarter. Compared to the previous year, it is down by $9.97 billion, a decline of 13%. This number not only falls short of the usual $70 billion mark seen in recent years but also marks a new five-year low since the first quarter of 2020.

In light of the significant decline in dollar assets, Professor Chen Songxing analyzed that the decline reflects a shaken global confidence in the dollar, attributing it to three main factors: rising structural risks, a loosening position of the dollar as a safe haven, and economic weaknesses in the United States. Particularly after Trump's announcement to run again, new tariffs on China have diminished the international market's trust in the dollar.

Moreover, with recent US economic data revealing weaknesses, a cooling of inflation, and declining corporate profits, market sentiment has shifted towards a conservative outlook for the US economy. Consequently, funds are gradually flowing from dollar assets to alternatives like gold, euros, yen, and Swiss francs. In this highly uncertain environment, the Central Bank of Taiwan may adjust foreign exchange positions to manage risk.