Taiwan activates $15 billion stock stabilization fund after precipitous falls
Taiwan authorized the activation of its $15 billion stock stabilization fund on Tuesday to prop up the market after two days of sharp falls in reaction to US President Donald Trump's new import tariffs.
Trump last week announced that Taiwan, which runs a large trade surplus with the United States, will get a 32 percent tariff, sending the markets into a tailspin on Monday after they reopened following a Thursday and Friday holiday.
Taiwan's finance ministry said in a statement that the government-run National Stabilization Fund, which has some T$500 billion ($15.15 billion) in assets that can bolster Taiwan stocks in times of crisis, had been given the go-ahead to intervene in the stock market.
The fund has been authorized to use its assets 'to carry out market stabilization tasks as appropriate to maintain the stability of Taiwan's stock trading market,' it said.
On Monday, the benchmark index dropped by close to 10 percent and it fell another 4 percent on Tuesday, hitting its lowest level in 14 months.
Noting that the 'international panic atmosphere was strong,' foreign investors have continued to sell their holdings since the start of the year, it said.
'This is not conducive to the stability of the Taiwan Stock Exchange,' the ministry added.
Taiwan has previously activated the fund to prop up the stock market at other times of turmoil, such as at the start of the COVID pandemic.
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