Deputy Finance Minister Juan Ching-hwa said on Tuesday that the ministry would use the National Stabilization Fund to boost the stock market only as a last resort.
Juan’s comments came after the TAIEX saw panic selling on Monday and Tuesday triggered by record levels of volatility in global stock markets. On Monday, the Dow Jones fell 12.9%, the biggest drop since 1987, over coronavirus fears. Stock markets in China, Japan and South Korea also went down.
Juan said the fundamentals of the US economy remain strong. He said previous experience shows that the US Federal Reserve’s cut of interest rates could boost stocks in the long run.
Financial Supervisory Commission (FSC) Chairman Wellington Koo urged investors to have confidence in the local stock market as the TAIEX’s fundamentals are stable. Koo said while foreign investors have sold some shares, some of the funds have not been remitted overseas and are still in Taiwan. Koo said that Taiwan’s effectiveness in containing COVID-19 is giving investors some confidence.