TAIPEI (Taiwan News) — Taiwan’s foreign exchange reserves rose to NT$18.96 trillion (US$602.55 billion) in December, maintaining the country’s position as the fourth-largest holder in the world, the Central Bank said Tuesday.

Reserves grew by NT$814.1 billion over the year, including a NT$86.87 billion increase in December, per Liberty Times. Gains were driven by a weaker US dollar and stronger major currencies such as the pound, euro, and Canadian dollar, along with investment income from reserves, per UDN.

Central Bank Foreign Exchange Department Director General Tsai Chiang-min (蔡炯民) said net foreign capital outflow in December was about NT$113.3 billion. Year-end demand for Taiwan dollars from exporters and repatriated ETF funds largely offset each other, limiting market intervention.

Tsai highlighted that new accounting rules for life insurers could affect hedging strategies and Taiwan dollar demand. Previously, insurers used financial contracts to protect themselves from currency swings.

Under the new rules, insurers who decide not to hedge when contracts expire will need to settle in US dollars. Tsai said insurers must inform the Central Bank in advance, allowing transactions to be spread out over time and reducing sudden pressure on the currency.

Tsai said movements in the Taiwan dollar are still driven mainly by foreign investors, whose large and fast-moving funds can cause noticeable daily fluctuations, while domestic capital tends to balance itself out.

The Central Bank also reported net foreign exchange purchases of NT$40.6 billion in Q3, reflecting strong foreign inflows. Under a joint agreement with the US Treasury, Taiwan will now publish foreign exchange intervention data quarterly to improve transparency.