Taiwans 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 tolds: The rising reserves will certainly intensify our trade friction with the U.S. A central bank official who declined to be named said Taiwans 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 governments 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 Taiwans 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 1700 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. Lis 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. Taiwans 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.
TAIWAN RESERVES RISE ON TRADE SURPLUS, SPECULATION