Central Bank of China

PRESS RELEASE Release Date: February 5, 2004




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FOREIGN EXCHANGE RESERVES AS OF

JANUARY 31, 2004

The Foreign Exchange Reserves of the Republic of China amounted to US$214.93 billion at the end of January 2004, showing an increase of US$8,294 million from the figure recorded at the end of last month.

The main factors responsible for the increase in foreign exchange reserves in January 2004 are :

1.Net foreign capital inflows(including convertible bonds and GDR issued abroad), US$3.8 billion

2.Exporters have sold forward foreign exchange, US$3.1 billion

3.Returns from foreign exchange reserves management

The aforesaid items 1, Foreign capital inflows, tend to be short-term in nature and are subject to sudden reversal. Item 2, Selling forward foreign exchange in advance, will reduce the future supply of foreign exchange.

Long-term NT dollar interest rates are lower than those of many major international currencies. Our SEC has modified regulations relating to issuing convertible bonds in Taiwan to bring them in line with those relating to issuing convertible bonds abroad. Local enterprises are encouraged to issue NT dollar bonds to meet their NT dollar funding requirements. This would reduce not only the cost of borrowing but also exchange rate risk.



Note: The next dissemination will be made at 16:20 p.m. on March 5, 2004;

the advance release calendar can be accessed on our website at: http://www.cbc.gov.tw/EngHome/ESDDS/calacal.asp