TAIPEI (Taiwan News) — Central Bank Governor Yang Chin-lung (楊金龍) said TSMC’s planned NT$3.29 trillion (US$100 billion) investment in the US will have a limited impact on Taiwan’s foreign exchange reserves.

Yang’s comment came during a report to the legislature on Thursday that included analysis from the bank’s Foreign Exchange Bureau, Business Today reported. He also discussed a possible interest rate adjustment.

Yang said TSMC’s investment will have limited impact on the foreign exchange because the company will spend the NT$3.29 trillion over several years. He said the bank’s Foreign Exchange Bureau had discussed the topic with TSMC’s financial department.

The bank’s Foreign Exchange Bureau noted in a written report that TSMC predicts increased revenue growth. It said the company can use the US dollars earned from this growth to fund the investment, tempering the impact on foreign exchange markets.

The report noted that increased export orders after the investment may benefit Taiwan’s machinery manufacturers and others. This would bring foreign currency into Taiwan, reducing the impact on foreign exchange markets.

TSMC previously issued US dollar bonds when it invested in the US. The report said doing this again would also reduce the impact on foreign exchange by allowing the company to raise US dollars directly.

The Central Bank will discuss the interest rate at a board meeting next Thursday. Given possible electricity price increases, KMT Legislator Lin Te-fu (林德福) asked Lung if the bank planned to increase the interest rate to prevent inflation.

Lung said the impact of past electricity price changes on the consumer price index was insignificant. He said the board would discuss increasing the interest rate, though added that prices are mostly stable and core inflation has remained below 2% for the past two years.

According to the bank’s report, key factors that may impact Taiwan’s inflation rate include international conflicts, extreme weather events, potential increases in train fares and utility prices, and the effects of US President Donald Trump’s second term.

Regarding the recent record-high selloff of Taiwan stocks, Yang noted that the market has cooled since Trump took office. While he acknowledged concerns about a recession, he described the selloff as a market correction.

Yang also pointed out that market uncertainties could affect investments, manufacturers, and consumers, which would be detrimental to economic growth. He emphasized the need for close monitoring.