TAIPEI Taiwan's vice premier Jiang Yih-Huah will replace premier Sean Chen, the presidential office said in statement issued late on Thursday, as part of a cabinet reshuffle that could see a new central bank chief.
Central bank chief Perng Fai-nan wants to retire as part of the reshuffle, two lawmakers told a Taiwanese television station on Thursday.
A central bank official refused to comment on Perng's possible retirement. Perng's third five-year term is due to end in February.
Taiwanese media have reported that Chen was a possible candidate to replace Perng -- nicknamed the "forex killer" by currency dealers.
It was thought Chen would take a less stringent stance on forex management after the forthright Perng, who was known for his tough stance against currency speculation and for keeping an iron grip on Taiwan's exchange rate.
Taiwan has the world's fourth-largest foreign exchange reserves.
In replacing Chen, a career civil servant, with academic Jiang as the new premier, President Ma Ying-jeou was installing an ally as head of the administrative branches of government, said Shane Lee, a political science professor at Chang Jung university.
"So I don't expect any big changes in policy direction after Jiang takes over, it'll still be under the control of Ma," Lee said. "He is very smart but he may not have enough experience in political administration or get enough support in cabinet."
Mao Chi-kuo, the transportation minister, will take over from Jiang as vice premier, the statement from the presidential office said.
(Reporting by Faith Hung and Clare Jim; Editing by Paul Tait and Michael Perry)