Stronger currency hurting Taiwan insurersApril 28 2017 by InsuranceAsia News Staff
The continued strength of the Taiwanese dollar is putting a strain on the island’s insurance sector, with players recording NT$65.8 billion (US$2.18 billion) in foreign-exchange related losses as of the end of March this year.
The Financial Supervisory Commission (FSC) reported that insurers suffered a total of NT$508.8 billion in forex losses, although some NT$416.9 billion was offset by hedging measures.
Another NT$26.1 billion was charged against forex reserves, the commission added.
The reserves have been thinning at a quick pace recently with the NT dollar faring 7% stronger since the start of 2017.
At least nine local insurers are on the verge of exhausting their reserves with 20% left at this point. They might stop using the remaining 20% this month, according to the FSC.
Taiwan’s foreign exchange reserves plunged to NT$18 billion in March this year, a five-year low. The stronger NT has also eaten up earnings at Taiwan’s top tech firms.
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