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Central bank chief likely to speak on prices, housing

Central bank Governor Perng Fai-nan (彭淮南) is expected to address consumer price and housing issues on Monday when he appears before the legislature's finance committee, a draft of his written report submitted yesterday to the legislature showed.

Perng's strong determination to rein in inflation, exemplified by the bank's interest rate hike last week, has encouraged speculation that the bank would continue using monetary policies to maintain price stability.

The draft report, a copy of which was obtained by the Chinese-language Liberty Times (the sister publication of the Taipei Times), showed that Perng would tell lawmakers that the supply in the domestic real estate market remains plentiful amid rising housing prices.

The central bank's optimistic tone on the housing market, however, contrasts greatly with reports by other government agencies, which said that signs for a downturn in the market were emerging.

Last week, a quarterly housing demand survey issued by the Council for Economic Planning and Development showed that market confidence for Taipei City had turned bearish for the first time since the third quarter of 2003.

On Thursday, the Ministry of the Interior said the monitoring indicators for the housing market had flashed a yellow-blue light in the second quarter, indicating a slowdown.

Yesterday, the central bank's monthly data on consumer housing loans also showed a slower increase last month, rising NT$21.14 billion month-on-month to NT$4.6 trillion.

The loans grew by NT$28.3 billion in July and NT$26.2 billion in June, the bank's tallies showed.

As for inflationary pressure, the report said the nation's consumer prices had increased by only 0.78 percent on average since 1998, better than the rate in the US, the euro zone and South Korea.

The bank will continue adjusting its rates to help sustain healthy economic development, the draft report said.
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