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TAIPEI (Reuters) - Taiwan authorised the activation of its $15 billion stock stabilisation fund on Tuesday to prop up the market after two days of sharp falls in reaction to U.S. 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% tariff, sending the markets into a tailspin on Monday after they re-opened following a Thursday and Friday holiday.
Taiwan's finance ministry said in a statement that the government-run National Stabilisation 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 authorised to use its assets "to carry out market stabilisation 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% and it fell another 4% 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.
($1 = 33.0030 Taiwan dollars)
(Reporting by Ben Blanchard; Editing by Andrew Cawthorne and Kim Coghill)
