On Wednesday the US Federal Reserve raised interest rates by an additional 0.75%, causing American and Taiwanese stocks to drop. On Thursday Taiwan’s Finance Minister Su Chien-jung (蘇建榮) said authorities are closely monitoring the situation and have NT$200 billion (US$6.2 billion) in free reserves to stabilize markets.
The US Federal Reserve is raising interest rates to deal with persistent high levels of inflation. Su says the US central bank’s decision to jack up interest rates has caused US stocks to take a hit.
The minister says American markets are closely tied to Taiwan’s semiconductor industry, dragging down the technology company stocks. Beyond the country’s available reserves, Su says authorities can tap into an additional NT$300 billion (US$9.3 billion) to support stocks.
Chief financial supervisor Huang Tien-mu (黃天牧) says today’s situation is different from other financial crises in 2008 and 2014. He says those crises were short term shocks that required bailouts.
Huang says today’s difficulties are instead being caused by US interest rates continuously rising, and can’t be solved quickly. He says authorities need to take various factors into consideration before acting.