Taiwan's Stabilization Fund Ready to Shield Stock Market from Global Economic Storm

The National Financial Stabilization Fund mobilizes to counter market volatility amidst US tariffs and global uncertainties.

Taipei, Taiwan – April 8th – In a move to bolster investor confidence and ease market volatility, Taiwan's National Financial Stabilization Fund has authorized an intervention in the local stock market. The decision, announced on Tuesday, comes in response to escalating concerns over global economic uncertainties, including the impact of tariffs imposed by the United States.

The committee overseeing the NT$500 billion (US$15.16 billion) fund, operating under the Executive Yuan, convened on Tuesday, advancing a meeting originally slated for next Monday. This proactive stance signals a firm commitment to stabilizing the market, with intervention potentially starting as early as Wednesday.

This marks the ninth intervention by the fund since its establishment in 2000. The urgency of the situation is underscored by the recent market performance. The Taiex, Taiwan Stock Exchange's benchmark weighted index, experienced a dramatic decline on Monday, plunging 2,065.87 points (9.7 percent) – the largest single-day drop in its history. This trend continued on Tuesday, with the index falling an additional 4.02 percent. Further volatility is anticipated, especially with the implementation of higher individualized tariffs, including a 32-percent tariff imposed by the Trump administration on Taiwan, set to take effect.

The National Financial Stabilization Fund has a proven track record of market support, having previously intervened in 2000 (twice), 2004, 2008, 2011, 2015, 2020 and 2022. The fund's largest intervention in terms of volume occurred in October 2000, deploying NT$120 billion to counter anxieties stemming from the dot-com bubble, escalating oil prices, and the suspension of construction on Taiwan's No. 4 nuclear plant.

The longest intervention, lasting 275 days, took place in July 2022, utilizing a comparatively smaller NT$54.51 billion, amidst growing market unease over rising U.S. inflation figures.