While the nation's monetary policymaker has not aggressively raised the benchmark interest rate as some economists had predicted, it will continue to tighten fiscal policy for the remainder of the year in order to fight inflationary pressures, analysts said yesterday.
The central bank announced yesterday it was raising the discount rate by 12.5 basis points to 3.625 percent, its 16th consecutive quarterly increase since October 2004.
In addition, the central bank announced it was lifting the reserve requirements for passbook deposits by 1.25 percentage points and the reserve requirements for time deposits by 0.75 percentage points, in a bid to curb excessive liquidity in the banking system, the central bank said in a statement.
The central bank also adjusted downward its target zone for aggregate M2 money supply growth to a range between 2 percent and 6 percent for the remainder of the year, from its previous range of 3 percent to 7 percent to reflect diversified portfolio allocations and a decreasing demand for cash because of expectations of rising inflation.
The central bank “seems to be trying to convince the public that it is in top gear in the fight against inflation,” Citi Investment Research economist Cheng Cheng-mount (鄭貞茂) wrote in a research note yesterday.
Cheng had predicted a rate hike of 0.25 percent by the central bank before yesterday’s board meeting.
Central bank governor Perng Fai-nan (彭淮南) told a press briefing following the board meeting that the bank’s rates had reached a “neutral” level. It “hinted that future monetary policy will probably focus more on controlling the ‘quantity’ of money instead of focusing on the ‘price,’” Cheng wrote.
Like elsewhere in Asia, the latest rate increases by Taiwan’s central bank reflected a cross-border concern among regional monetary policymakers about upside inflationary risks on the back of rising oil and food prices.
The government’s latest consumer price index data showed inflation grew 3.71 percent year-on-year last month, following a rise of 3.85 percent in the previous month.
But inflation is likely to rebound significantly following the recent announcement of more fuel and electricity price increases and Deutsche Bank’s economics research unit yesterday predicted the central bank would “remain vigilant and maintain the tightening bias” until end of the year, it said in an e-mailed statement.
Cheng forecast that the central bank would implement two more rate increases of 0.125 percentage points following the board meetings in September and December.
Other tightening measures are also likely to materialize. Cheng said any additional measures could negatively affect domestic sentiment, especially on the stock market, in light of the increased global economic uncertainty. But the impact on the foreign exchange market would likely be more muted, he said.
Elon Musk’s lieutenants have reached out to chip industry suppliers, including Applied Materials Inc, Tokyo Electron Ltd and Lam Research Corp, for his envisioned Terafab, early steps in an audacious and likely arduous attempt to break into the production of cutting-edge chips. Staff working for the joint venture between Tesla Inc and Space Exploration Technologies Corp (SpaceX) have sought price quotes and delivery times for an array of chipmaking gear, people familiar with the matter said. In past weeks, they’ve contacted makers of photomasks, substrates, etchers, depositors, cleaning devices, testers and other tools, according to the people, who asked not to
Taiwan is attracting a growing number of foreign jobseekers as companies increasingly recruit overseas talent to ease labor shortages and expand global reach, recruitment platform 104 Job Bank (104人力銀行) said yesterday. More than 40,000 foreign nationals searched for jobs in Taiwan through the platform last year, a 28 percent increase from a year earlier, the company said. Malaysians accounted for the largest share of overseas jobseekers at 12.2 percent, followed by Indonesians at 11.9 percent and Vietnamese at 10.8 percent. Indonesian applicants surged more than 50 percent year-on-year, while Vietnamese jobseekers rose by more than 30 percent. Applicants from the
NO SHORTCUTS: Asked about Elon Musk’s Terafab initiative, TSMC CEO C.C. Wei said it takes two to three years to build a fab and another one to two to ramp it up Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday raised its revenue growth forecast for this year to above 30 percent, up from the 25 percent it estimated three months earlier, citing extremely robust artificial intelligence (AI)-related chip demand. “Our customers and customers’ customers, who are mainly cloud service providers, continue to send us very positive signals and outlook,” TSMC chairman and CEO C.C. Wei (魏哲家) said at an earnings conference. The company also hiked its capital expenditure for this year toward the higher end of its forecast, or US$56 billion, as it aims to step up advanced chip capacity expansions, such as
The founder of Chinese property giant Evergrande Group (恆大集團) has pleaded guilty to charges of fraud and bribery, a court said yesterday, the latest blow for what was once the country’s leading developer. Evergrande’s rise was propelled by decades of rapid urbanization and rising living standards, but in 2020, its access to credit dramatically narrowed when the government introduced curbs on excessive borrowing and speculation. The company defaulted in 2021 after struggling to repay creditors. Founder Xu Jiayin (許家印), 67, known as Hui Ka Yan in Cantonese, was reportedly held by police in 2023, with Evergrande saying he had been subjected to
RSS