With Taiwan facing financial inflows that have pushed the local currency higher in the past month, Premier Wu Den-yih said Friday that Taiwan will guard against 'hot money' but still welcomes foreign investment in the country's infrastructure. Answering questions at a legislative hearing on a possible 'hot money tax, ' Wu said the government will take measures to curb the inflow of speculative funds to avoid a repeat of the 1997-1998 Asian Financial Crisis. The crisis was precipitated by speculators aggressively driving down the values of many Asian currencies that left some countries on the verge of bankruptcy and dependent on bailouts from international organizations. 'However, foreign investment in Taiwan's infrastructure development will be more than welcome,' Wu stressed. Perng Fai-nan, the governor of Taiwan's central bank, was reserved about imposing a 'hot money tax, ' and he said that doing so was beyond his bank's power and required the legislature's approval. Fueled by a weakening U.S. dollar, large amounts of speculative funds have been entering Asian markets, including Taiwan, to profit from the expected appreciation of currencies in the region. The Taiwan dollar has appreciated by nearly 3 percent over the past month. It closed at NT$31.095 to the greenback Friday, slightly down from its 28-month closing high of NT$31.042 to the U.S. dollar a day earlier. The signing of an economic cooperation framework agreement with China, a rising Chinese yuan and a depreciating U.S. dollar have created room for Taiwan's currency to appreciate against the U.S. unit, said Huang Yin-ji, chief economist at SinoPac Financial Holdings Co. Perng stressed Thursday that measures by governments around the world to allow a gradual appreciation of their currencies have been necessary, but he hinted that his bank might intervene to stop any rapid upswing in the Taiwan dollar. 