The New Taiwan dollar yesterday continued its rise against its US counterpart, closing NT$0.144 higher at NT$32.095 on the Taipei foreign exchange market, its highest level since Nov. 2000.
The local currency rose as high as NT$32.043 against the greenback around noon yesterday amid speculation that China had cut back on its holdings of US Treasury bonds. Turnover was US$935 million, down from the previous day's US$1.369 billion.
The NT dollar rose 1.4 percent against the US dollar this week and has strengthened 5.4 percent since the beginning of last month.
The local currency's momentum is expected to continue at a steady pace in the foreseeable future, an economist at the Taiwan Institute of Economic Research (TIER,
"The central bank appeared to take a more relaxed attitude about the strengthening NT dollar this time in a bid to dilute the nation's inflationary pressure," TIER's vice president David Hong (
While how much more the NT dollar will strengthen is still unclear, Hong said the recent appreciation of the NT dollar remained acceptable, as the rise was relatively small compared with other Asian currencies.
"Therefore, we expect the central bank will allow the NT dollar to keep rising slowly in the future to avoid jeopardizing the nation's export competitiveness," Hong said.
Still, the nation faces strong appreciation pressure as a result of its vast foreign reserves, increasing trade surplus and recent foreign capital inflows, he added.
Accordingly, the institute yesterday adjusted upward its exchange rate forecast for the NT dollar to NT$32.2 versus the greenback on average next year, up from the previous estimate of NT$32.67 made earlier this month.
There was speculation yesterday that China's move to cut a portion of its US Treasury bonds was to pave the way for revaluating the yuan. But Hong said a strengthening yuan could hurt Taiwanese companies based in China and aggravate appreciation pressure on the NT dollar.
It is hard to predict the scale and pace of the yuan's revaluation at this stage, considering China's strong governmental control on foreign exchange policy, he added.
While the rising NT dollar is undercutting Taiwanese exporters' profit margins, companies said they are more conservative about the next six months as a result of higher oil prices and other reasons, according to a poll released yesterday by the institute.
About 12.21 percent of the companies polled said they are bullish about economic prospects, which is a significant plunge compared with 37.4 percent when the institute conducted the same survey last month.
The institute's business climate index dropped 4.87 percent to 104.50 last month, from 109.85 in the previous month, marking the largest decline since the outbreak of SARS in March last year, TIER said.
ISSUES: Gogoro has been struggling with ballooning losses and was recently embroiled in alleged subsidy fraud, using Chinese-made components instead of locally made parts Gogoro Inc (睿能創意), the nation’s biggest electric scooter maker, yesterday said that its chairman and CEO Horace Luke (陸學森) has resigned amid chronic losses and probes into the company’s alleged involvement in subsidy fraud. The board of directors nominated Reuntex Group (潤泰集團) general counsel Tamon Tseng (曾夢達) as the company’s new chairman, Gogoro said in a statement. Ruentex is Gogoro’s biggest stakeholder. Gogoro Taiwan general manager Henry Chiang (姜家煒) is to serve as acting CEO during the interim period, the statement said. Luke’s departure came as a bombshell yesterday. As a company founder, he has played a key role in pushing for the
China has claimed a breakthrough in developing homegrown chipmaking equipment, an important step in overcoming US sanctions designed to thwart Beijing’s semiconductor goals. State-linked organizations are advised to use a new laser-based immersion lithography machine with a resolution of 65 nanometers or better, the Chinese Ministry of Industry and Information Technology (MIIT) said in an announcement this month. Although the note does not specify the supplier, the spec marks a significant step up from the previous most advanced indigenous equipment — developed by Shanghai Micro Electronics Equipment Group Co (SMEE, 上海微電子) — which stood at about 90 nanometers. MIIT’s claimed advances last
CROSS-STRAIT TENSIONS: The US company could switch orders from TSMC to alternative suppliers, but that would lower chip quality, CEO Jensen Huang said Nvidia Corp CEO Jensen Huang (黃仁勳), whose products have become the hottest commodity in the technology world, on Wednesday said that the scramble for a limited amount of supply has frustrated some customers and raised tensions. “The demand on it is so great, and everyone wants to be first and everyone wants to be most,” he told the audience at a Goldman Sachs Group Inc technology conference in San Francisco. “We probably have more emotional customers today. Deservedly so. It’s tense. We’re trying to do the best we can.” Huang’s company is experiencing strong demand for its latest generation of chips, called
GLOBAL ECONOMY: Policymakers have a choice of a small 25 basis-point cut or a bold cut of 50 basis points, which would help the labor market, but might reignite inflation The US Federal Reserve is gearing up to announce its first interest rate cut in more than four years on Wednesday, with policymakers expected to debate how big a move to make less than two months before the US presidential election. Senior officials at the US central bank including Fed Chairman Jerome Powell have in recent weeks indicated that a rate cut is coming this month, as inflation eases toward the bank’s long-term target of two percent, and the labor market continues to cool. The Fed, which has a dual mandate from the US Congress to act independently to ensure