TAIWAN SAID CONSIDERING CURRENCY LIBERALISATION

  Taiwan's central bank is considering
  proposals to ease currency restrictions to reduce foreign
  exchange reserves of 51 billion U.S. Dlrs, a local newspaper
  reported today.
      The China Times, which has close ties with the government,
  quoted central bank governor Chang Chi-cheng as saying the
  government had agreed in principle to liberalise financial
  restrictions.
      The bank was considering proposals to allow firms and
  individuals to hold foreign exchange and invest in foreign
  stocks for the first time, Chang was quoted as saying.
      All foreign exchange must now be handed to local banks and
  exchanged for local currency. Firms and individuals may only
  invest in foreign government bonds, treasury bills and
  certificates of deposit.
      Central bank and other government officials were not
  available to comment on the report.
      Economists said it was likely that the government would
  ease foreign exchange controls, but only gradually.
      They said vast foreign currency reserves, earned mainly
  from huge trade surpluses with the United States, made Taiwan a
  target for U.S. Protectionism.
      Taiwan's trade surplus with the U.S. Rose to 13.6 billion
  U.S. Dlrs last year compared with 10.2 billion in 1985.
      "The central bank has to go in this direction," said Su
  Han-min, chief economist with the International Commercial Bank
  of China. "If they don't quicken the pace, Washington could
  retaliate and really damage Taiwan."
  

