Taiwanese authorities said Tuesday they will intervene in the island's stock market and spend up to $16 billion on shares, after it was hit hard by the fall-out from Europe's deepening debt crisis.
"We've agreed to authorise the executive secretary of the national stabilisation fund to adopt some proper measures to stabilise the stock market," Vice Premier Sean Chen told reporters.
The fund was set up by the government and state banks in 1999 to buy stocks during sharp declines.
Chen did not specify when the fund, which could spend up to NT$500 billion ($16.5 billion) including bank borrowings, will start purchasing.
The finance ministry said geopolitical uncertainties following the death of North Korea's Kim Jong-Il, combined with investor confidence being shaken by the global downtrend, prompted intervention to keep market order.
Taiwan's weighted index has dived 29 percent since January, and the fall is one of the chief complaints against President Ma Ying-jeou, who is seeking a second and last four-year term at an election in January.
The last time the fund swooped in was late 2008, when the market was hit by the global financial crisis. Then, it bought nearly US$2 billion worth of shares.
-- Dow Jones Newswires contributed to this article --