TAIWAN RESERVES RISE ON TRADE SURPLUS, SPECULATION
Taiwan's foreign exchange reserves have
risen to a new high of 56 billion U.S. Dlrs, and officials
attribute the increase to a surging trade surplus and the
influx of speculative funds.
    The reserves, up from 54 billion dlrs on April 19, compare
with 27.3 billion a year ago, the Central Bank said.
    Vice economic minister Wang Chien-shien told Reuters: "The
rising reserves will certainly intensify our trade friction
with the U.S."
    A central bank official, who declined to be named, said
Taiwan's trade surplus is expected to exceed 5.5 billion U.S.
Dlrs in the first four months of 1987, against 4.25 billion a
year ago.
    The influx of speculative funds, mainly from Hong Kong,
Japan and the U.S., Also played a major role behind the rise of
the reserves, he said, but declined to give figures.
    Banking sources said almost 10 billion U.S. Dlrs had
entered Taiwan since early 1986. About three billion of the
funds were remitted through different channels, including the
black market, since the start of this year, they said.
    Wang Chao-ming, vice chairman of the government's Council
for Economic Planning and Development, said he expects the
reserves to rise in the next few months because of the
continuing high level of Taiwan's exports and the steady
appreciation of the local dollar against the U.S. Currency.
    "The latest government moves to open (the domestic) market,
cut import tariffs and lift foreign exchange controls have
achieved little success," he said.
    Vice economic minister Li Mo said tariffs were cut on some
1,700 products in January and a further 862 this month in a bid
to encourage more imports, especially the U.S.
    More tariff cuts on about 300 imported products, including
televisions, video tape recorders, cosmetics and refrigerators
will be announced in a month or two, Li said.
    Li's colleague, Wang Chien-shien, said the government will
send several trade missions to the U.S. This year to buy about
one billion U.S. Dlrs of products, including machinery, power
equipment, grains and precision tools.
    "We earnestly hope to reduce our trade surplus with the
U.S.," he said.
    Taiwan's trade surplus rose to a record 13.6 billion U.S.
Dlrs last year from 10.2 billion in 1985, and it widened to
3.61 billion in the first quarter of 1987 against 2.78 billion
a year ago, official statistics show.
    The surplus has increased U.S. Pressure on Taiwan for a
faster appreciation of its currency, which has risen by about
18 pct since September 1985.
    It opened at 33.10 to the U.S. Dollar today.
 REUTER
