Foreign exchange reserves hit a record high of US$423.45 billion in Taiwan in June and also set a new high of US$7.47 trillion in Asia. Seventy percent of the increase in foreign exchange reserves in 2013 were seen in Asia. The government, therefore, has to seriously consider measures to manage Taiwan’s huge foreign exchange reserves. We have previously suggested setting aside a part of the country’s foreign exchange reserves to establish a sovereign wealth fund.
Currently there are more than 30 countries, including Singapore, Kuwait, Brunei, Norway and the United Arab Emirates, that have set up such funds with total combined assets of US$6.321 trillion. Although Taiwan has not set up such a fund, it has one in practice. The central bank has made good use of its foreign exchange reserves in recent years, contributing about NT$200 billion a year to national coffers, helping cover fiscal deficits………………………………………..Full Article: Source