By Faith Hung
TAIPEI (Reuters) - Taiwan's central bank governor said on Thursday the U.S. government is unlikely to label the country as a currency manipulator under the existing criteria used by the U.S. Treasury to assess currency policies of its trading partners.
"If the U.S. does not change its three criteria, Taiwan will not be labeled," governor Perng Fai-nan told a parliament session.
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Taiwan meets two of the three U.S. criteria to be labeled a currency manipulator, including intervention to weaken the currency. An upcoming new iPhone model, for which Taiwan makes many of the components, is expected to boost its trade surplus with the United States.
But trade officials in Taiwan have said it shouldn't be a target for trade disputes with Washington because its goods trade surplus with its second largest trading partner has shrunk in recent years.
Perng declined to comment on whether the stronger local currency is related to concerns Taiwan may be labeled as a currency manipulator by the United States.
"Taiwan's central bank has an open communication channel with the U.S. government," he said.
"It would be a decision by the United States. We have provided relevant information for their consideration."
The administration of U.S. President Donald Trump has said it will analyze the currency practices of major trading partners, including China, Taiwan and South Korea. The U.S. Treasury is due to publish a report on these practices in mid-April.
The U.S. Treasury designated Taiwan and South Korea as currency manipulators in 1988, the year that Congress enacted the currency review law. China was the last country to get the designation, in 1994.
Traders speculate the rise in the local currency suggested the central bank, which frequently intervenes in the currency market, has taken to the sidelines due to worries the U.S. will label Taiwan a currency manipulator.
Perng declined to comment on the speculation, saying that funds inflows were a key reason for the local currency's rally.
The Taiwan dollar has risen about 5 percent so far this year, making it one of Asia's best-performing currencies against the greenback.
"Foreign fund inflows to Taiwan has been $3 billion this year, mainly from U.S. and European investors buying stocks and bonds." said the governor.
(Additional reporting by Loh Liang-sa; Editing by Randy Fabi & Shri Navaratnam)