To:William Jones who wrote (217) From: John Barendrecht Sunday, Jul 6, 1997 12:31 AM Respond to of 79917
Taiwan gold reserves lose T$9.2 bln in value-paper TAIPEI, July 6 (Reuter) - The account value of Taiwan central bank's gold reserves has dropped by T$9.2 billion ($330 million) after sharp declines in the price of the yellow metal in the past two months, the Economic Daily News said on Sunday.
Taiwan holds 410 metric tonnes of gold, worth T$118.9 billion now in account value, down T$9.2 billion from T$128.1 billion two months ago, the paper said.
On Friday, Taiwan central bank vice governor Hsu Chia-tung said the bank had reviewed possible changes in its gold reserve policy in line with other central banks, but had no plans to sell gold now because of prevailing market conditions.
``We have had some internal review of how we might change our gold reserve policy,'' Hsu said. ``But right now this cannot be implemented.''
Taiwan's gold reserves and foreign exchange reserves are used by the central bank to issue Taiwan dollars, whose total issuance stands at around T$630 billion, the paper said.
At present, gold reserves accounted for 19.6 percent of the Taiwan dollar issuance, the paper said. U.S. dollars, German marks, Japanese yen, swiss franc, and other foreign exchange currency reserves took 53, 16.2, 7.9, 2.5 and 0.8 percent, respectively.
Taiwan's foreign exchange reserves, the world's third largest next to Japan and China, totalled US$90.01 billion at the end of May, according to the central bank.
Hsu said any sale of gold by Taiwan would have to take into consideration the prevailing price and market conditions.
``If we were to consider selling down our gold reserves, we must take the right timing,'' he said. ``Considering that the gold price is low right now, we don't consider the timing to be right.''
The central bank's decision to stay its gold reserve policy was in line with expectations of local gold traders, who have said Australia's heavy selling might motivate other central banks to sell -- but not Taiwan's.
Local Taiwan gold demand has risen sharply as the price has slipped to 12-year lows.
Traders estimated demand from Taiwan's jewellery industry had risen about 20 percent since late June, while investors' buying had jumped about 50 percent in the past five days alone, a leading dealer at Taiwan's Central Trust of China said.
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