TAIPEI (Taiwan News) — Taiwan’s National Financial Stabilization Fund approved stock market intervention on Tuesday to restore investor confidence and stabilize the capital market after the stock market dropped significantly over two trading days.
The measure comes after Trump's announced tariffs, which severely impacted global stock markets and caused a 2,838.27-point drop in Taiwan’s stock market. The fund is authorized to use up to NT$500 billion (US$15.16 billion) for intervention, marking its ninth use since its establishment, per CNA.
Established in 2000, the fund is designed to step in during significant domestic or international crises that could undermine public confidence or disrupt markets. It helps stabilize Taiwan's capital markets during turbulent periods.
The Taiwan Stock Exchange Capitalization Weighted Stock Index, or TAIEX, closed at 21,298.2 on Wednesday, the last trading day of the week, just ahead of the key 20,000-point threshold. On Tuesday, it closed at 18,459.95, the second session after trading resumed on Monday.
The National Stabilization Fund is overseen by the Cabinet, with the Vice Premier serving as its chairman. Regular committee meetings are held in January, April, July, and October.
The fund has taken action in the market eight times. These interventions were prompted by events including Taiwan's first political party transition and China’s strong warnings to Taiwan.
Other instances include the dot-com bubble, the March 19 shooting incident, the global financial crisis, the European debt crisis, China’s economic slowdown affecting global markets, and the COVID-19 pandemic. The most recent intervention occurred in July 2022, triggered by US inflation data and other unfavorable market conditions.
When stock market volatility and financial market instability occur, the National Stabilization Fund uses its resources to support the market. Although market analysts had initially believed intervention would be unlikely, the fund has confirmed it will take action.
