TAIPEI (Reuters) -Taiwan central bank governor Yang Chin-long said on Thursday that the large trade surplus with the United States is “not without a solution” but that it needs time, and the bank is concentrating on slowing the Taiwan dollar’s depreciation.
The U.S. Treasury Department this week kept the island on a monitoring list in its semi-annual report on the currency practices of major trading partners.
Taiwan runs a large trade surplus with the United States due to its role as a major producer of semiconductors used in everything from iPhones to cars and fighter jets.
Yang, speaking in parliament where he was taking lawmaker questions, said the issue of the trade surplus was “not without a solution but it needs time”.
The central bank is currently concentrating on arresting the Taiwan dollar’s depreciation, he added. The currency has lost almost 5% of its value against the greenback so far this year.
Taiwan’s trade-dependent economy grew faster than expected in the third quarter, helped by domestic consumption, though exports remained weak due to sluggish global demand for the island’s hi-tech products and the government expects full-year 2023 growth of 1.61%, the slowest in eight years.
Yang said the central bank may again revise down GDP growth, but estimated it would still expand more than 1% this year.
On inflation, he said Taiwan’s is relatively mild compared with other countries, and that the bank was looking at the core consumer price index (CPI), a better measure of underlying price pressures.
(Reporting by Jeanny Kao; Writing by Ben Blanchard; Editing by Christopher Cushing and Raju Gopalakrishnan)