Sat, Mar 27, 2004 - Page 10 News List

Central bank vows to defend currency

By Joyce Huang  /  STAFF REPORTER

The central bank yesterday decided to keep interest rates unchanged while vowing to maintain the stability of the nation's currency amid post-election political chaos.

"If political uncertainty continues after Saturday's rally and causes great fluctuations in the local currency, the central bank is ready to step in and maintain the New Taiwan dollar's dynamic stability," central bank Governor Perng Fai-nan (彭淮南) said yesterday after the bank's quarterly policy meeting.

Perng said that it was too early to tell whether the ongoing political dispute would damage the nation's economy. He said the nation's economic fundamentals were healthy, with exports growing by double digits and private consumption and domestic demand recovering.

Despite the signs of rising consumer prices, Perng dismissed concerns of inflationary pressures.

But he acknowledged a large amount of capital outflows during the past five days, as foreign investors dumped shares and locked in profits before the presidential election.

The central bank has cut the rate 15 times since December 2000, spurring spending and investment in Taiwan and helping the government achieve its goal of expanding the economy 4.74 percent this year after posting 3.15 percent growth for last year.

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