Central bank to ensure forex stability amid U.S. talks: Governor

Taipei, Oct. 23 (CNA) Taiwan's central bank will closely monitor exchange rate movements to avoid being labeled a currency manipulator by Washington, as the country's trade surplus with the United States is projected to expand to US$120 billion this year, the bank's governor, Yang Chin-long (楊金龍), said Thursday.

Speaking at a Legislative Yuan Finance Committee hearing, Yang acknowledged that Taiwan's widening surplus with the U.S., driven by strong exports amid the artificial intelligence boom, could complicate ongoing tariff negotiations.

This is a sensitive time for tariff talks, Yang said, warning that any perception of currency manipulation could pose a serious issue.

Yang made the remarks in response to questions from Democratic Progressive Party Legislator Wu Ping-jui (吳秉叡).

Wu noted that Taiwan's U.S. trade surplus exceeded US$60 billion last year and is expected to keep growing, an unfavorable factor in trade discussions, and urged the government to seek a more balanced trade relationship.

Yang said Taiwan could help narrow the gap by increasing purchases of U.S. arms and bulk goods as well as encouraging companies such as Taiwan Semiconductor Manufacturing Co. to expand investments in the U.S.

He added that the central bank would maintain exchange rate stability to support exporters while avoiding "red lines" in dealings with the U.S. Treasury.

Commenting on investment ties, Yang said applying Taiwan's successful science park experience in the United States -- a model currently under discussion in tariff negotiations -- could bring mutual benefits.

Also during the session, Kuomintang Legislator Lin Te-fu (林德福) asked what leverage Taiwan holds in seeking relief from overlapping tariffs.

Yang replied that Taiwan's advantage lies in the U.S.' continued reliance on Taiwan's AI products.

He added that, based on media reports, Taiwan-U.S. negotiations are nearing conclusion, with the tariff rate expected to be set below 20 percent.

Separately, Yang confirmed that the NT$500 note will be redesigned as part of a banknote overhaul to improve anti-counterfeiting features and adopt eco-friendly materials.

The current sika deer design will be replaced with a new theme selected by an advisory committee, Yang said.