Taiwan’s foreign exchange reserves dropped below the $600 billion mark for the first time in months, falling $7.9 billion to $597.15 billion at the end of June, as the island’s central bank intervened to slow the US dollar’s appreciation against the Taiwan dollar. The decline, which snapped a two-month rising streak, was part of a broader June retreat across major reserve holders. China’s reserves shrank by $26 billion to $3.416 trillion, while Russia’s international reserves fell $26.9 billion, or 3.6 percent, to $720.4 billion. The common driver was a sharp strengthening of the dollar after the Federal Reserve’s mid-June meeting, where the dot plot signalled at least one rate increase this year and the dollar index rose 2.26 percent against a basket of major currencies — its largest monthly gain in nearly a year.

The revaluation effect mechanically reduced the dollar value of non-dollar assets held by central banks. In Taipei, the central bank’s foreign exchange department noted that foreign institutional investors also moved funds out of the island in June, pushing the Taiwan dollar down 1.42 percent against the greenback. The bank sold US dollars to maintain market order, though on a smaller scale than during the Middle East turmoil in March. Viewed from Beijing, the State Administration of Foreign Exchange attributed the reserve decline to dollar strength and fluctuations in global asset prices, while economists polled by The Wall Street Journal had expected an $8 billion increase. In Moscow, the central bank cited revaluation effects, budget-rule operations and transactions involving the National Wealth Fund as additional factors behind the drop.

Gold holdings told a more complex story. China’s central bank added 480,000 troy ounces (about 15 tonnes) of bullion in June, extending its buying streak to a twentieth consecutive month — the longest since 2015. The purchases, which lifted total gold reserves to 75.44 million ounces, are widely seen in Beijing as part of a long-term de-dollarisation strategy aimed at insulating reserves from sanctions risk and US financial volatility. Yet gold still accounts for less than 10 percent of China’s reserve portfolio. Russia, by contrast, did not report new purchases, but the value of its monetary gold fell 8.2 percent to $298.99 billion as spot prices tumbled 11.65 percent in June — the steepest monthly decline since October 2008. The share of gold in Russian reserves slipped to 41.5 percent from 43.6 percent, though the physical stock remains a core usable asset alongside yuan holdings after Western sanctions froze much of Russia’s foreign-currency reserves in 2022.

Taiwan’s central bank reiterated that it holds ample reserves to guard against sudden capital outflows, while China’s foreign-exchange authority said it expects reserves to remain stable over the long term. The next factual milestone for reserve managers is the release of the Fed’s June meeting minutes, which could clarify the pace of future tightening and set the near-term direction for the dollar and gold prices.