Taiwan Criticised for Amount of Dollar Holdings

About 20 members of the Taiwan parliament criticised the government for holding too much of foreign exchange reserves in U.S. Dollars and asked the cabinet to diversify these holdings into other major currencies.

A parliament statement said the criticism came from 18 Kuomintang (nationalist) legislators and several opposition members, who asked the government to diversify reserves into mark, yen, Swiss franc, other currencies or gold.

It said that from September 1985 to September 1986 the central bank’s exchange rate loss was about 144 billion Taiwan dlrs.

Fourteen local banks lost 12.6 billion Taiwan dlrs during the period, it said.

In the same time span the Taiwan dollar rose to 36.77 to the U.S. Currency from 40.45. It closed at 33.17 today.

The statement said the central bank’s loss this year would more than double because of the rising Taiwan dollar and reserves, which had reached 54 billion U.S. Dlrs last week.

Government legislators said they expected the reserves to increase to more than 60 billion U.S. Dlrs this year and the trade surplus to increase by about 15 billion U.S. Dlrs, compared with 15.6 billion last year.