Taiwan president calls for end to 'false' news about US forex talks

By Liang-sa Loh and Faith Hung

TAIPEI, May 5 (Reuters) - Taiwan's president on Monday called for an end to "false" news about talks with the United States on foreign exchange rate policy, after the Taiwan dollar surged against the U.S. dollar on speculation Washington had asked for it to appreciate.

The Taiwan dollar on Monday and last Friday appreciated strongly against the greenback on market speculation that the U.S. had asked Taiwan to allow its currency to appreciate as part of the tariff talks, and is at a more than two-year high.

After Taiwan's central bank and Office of Trade Negotiations issued denials that tariff talks in Washington last week had involved the topic of foreign exchange, President Lai Ching-te took the unusual step of weighing in with a video message.

Taiwan's trade surplus with the United States is because of soaring demand for the tech products the island specialises in, like semiconductors, and Taiwan has never been listed by Washington as a currency manipulator, Lai said.

"Precisely because the cause of the Taiwan-U.S. trade deficit has nothing to do with the exchange rate, the exchange rate issue will naturally not be mentioned in negotiations between Taiwan and the United States," he added.

"Therefore, I would also like to ask malevolent people to stop deliberately spreading false information," Lai said, without offering any names.

Taiwan's economy is doing well and people should have confidence, he added.

"I would also like to ask all my good friends to share what I have reported, and to share the correct information with your friends and family."

On Saturday, the government said that Taiwan had concluded its first round of "substantive" tariff talks with the United States, describing the atmosphere as frank and cordial. It did not mention exchange rate issues.

Speaking to reporters at a hastily arranged news conference earlier on Monday, the exasperated sounding central bank governor Yang Chin-long repeatedly said there had been no exchange rate talks with the United States.

"If this had been a topic, we would have attended," Yang said, adding a call for the market to calm down and speculation to end.

Taiwan has told the United States it would not manipulate the exchange rate, but the Taiwan dollar has been fluctuating excessively and some people are trying to engage in large-scale speculation, he said.

"The abnormal situation of the past two days we hope can end here," Yang added.

The central bank has intervened in recent days to maintain market stability, he said.

Taiwan runs a large trade surplus with the United States, which surged 83% last year, with the island's exports to the U.S. hitting a record $111.4 billion, driven by demand for high-tech products such as semiconductors.