Thu, Sep 30, 2004 - Page 10 News List

Central banker gets better score in global report

PERFORMANCE In its latest report, `Global Finance' magazine lauds central bank Governor Perng Fai-nan for breaking the habit of aping the Fed

By Joyce Huang  /  STAFF REPORTER

Central bank Governor Perng Fai-nan's (彭淮南) performance is graded "B" this year, up from last year's "C," according to a report by Global Finance magazine scheduled to be released tomorrow.

The report, "2004 Central Banker Report Cards," lauded Perng's new-found independence to maintain "dynamic stability" in the nation's foreign exchange market, which supports its export-driven economy.

His grades in the past years slid to "C" last year and in 2002 from "B" in 2001 and "A" in 2000.

"Perng Fai-nan may go down in history as the central banker who tried to break the Central Bank of China's habit of moving in lockstep with the US Fed," the magazine said about Perng.

Global Finance also quoted Perng saying in May that the central bank may not follow the US Federal Reserve if it raises interest rates.

"Monetary policy decisions should be country-specific, and cross-country synchronization of monetary policy is not necessarily desirable," it quoted Perng as saying in Jeju Island, South Korea, during the annual meeting of the Asian Development Bank.

Taiwan has cut interest rates 15 times since December 2000, matching the Fed's actions nearly exactly. Local economists and market watchers have speculated that the central bank may raise interest rates today following its quarterly board meeting to avoid inflation, following the Fed's move last week.

The magazine said that Perng's decision to put an end to his three-year expansionary policy will be supported by the nation's economic growth forecasts for this year of 5.9 percent, and inflation that is unlikely to top 1.5 percent despite higher oil prices.

The annual survey rated the performance of 30 central bankers in the world this year, including those in 12 Asian countries.

Among the Asian bankers, Perng was awarded the same score as five of his counterparts, including India's Yaga Venugopal Reddy, Japan's Toshihiko Fukui, New Zealand's Alan Bollard, the Philippines' Rafael Buenaventura and Singapore's Park Seung.

Perng, however, outshone China's Zhou Xiaochuan (周小川) and Thailand's Pridiyathorn Devakula, who were graded "C" while lagging behind the A-graded performance of Australia's Ian Macfarlane and Indonesia's Burhanuddin Abdullah.

According to Global Finance, some central bankers stand out for their improved handling of their country's economy. They include Switzerland's Jean-Pierre Roth, whose grade leapt from "D" to "B" in recognition of his startling turnaround, and Canada's David Dodge, whose grade inched up half a grade from "D" to "C+."

The magazine awarded the Fed chairman Alan Greenspan a "C" this year on the basis that "he's done a reasonable job in what remain difficult circumstances." Global Finance said it expects Greenspan's grade to improve next year.

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