South Korea’s annual inflation rate was 5.5 percent last month, close to a 10-year high amid soaring prices of oil and other commodities, official figures showed yesterday.
The year-on-year rise in the consumer price index was the biggest since a 6.8 percent climb in November 1998, the National Statistical Office said. Month-on-month, the figure rose 0.6 percent.
The government of South Korean President Lee Myung-bak, who won office in December with a pledge to revitalize the economy, says it is now putting priority on fighting inflation rather than growth.
The central bank earlier yesterday raised its inflation forecast for the whole year to 4.8 percent from an earlier estimate of 3.3 percent. This would be the highest figure since 7.5 percent in 1998.
In the second half, inflation was forecast to hit 5.2 percent on rising energy prices and a weaker won which makes imports dearer, it said.
The figure for last month breached the central bank’s inflation target range of 2.5-3.5 percent for a seventh straight month.
South Korea, the world’s fifth-largest crude buyer, relies entirely on imports for its oil needs.
The inflation rise could put pressure on the central bank to increase its key interest rate this month.
The bank froze the rate at 5 percent for a 10th month last month.
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
‘SHORT TERM’: The local currency would likely remain strong in the near term, driven by anticipated US trade pressure, capital inflows and expectations of a US Fed rate cut The US dollar is expected to fall below NT$30 in the near term, as traders anticipate increased pressure from Washington for Taiwan to allow the New Taiwan dollar to appreciate, Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said. Following a sharp drop in the greenback against the NT dollar on Friday, Lin told the Central News Agency that the local currency is likely to remain strong in the short term, driven in part by market psychology surrounding anticipated US policy pressure. On Friday, the US dollar fell NT$0.953, or 3.07 percent, closing at NT$31.064 — its lowest level since Jan.
Hong Kong authorities ramped up sales of the local dollar as the greenback’s slide threatened the foreign-exchange peg. The Hong Kong Monetary Authority (HKMA) sold a record HK$60.5 billion (US$7.8 billion) of the city’s currency, according to an alert sent on its Bloomberg page yesterday in Asia, after it tested the upper end of its trading band. That added to the HK$56.1 billion of sales versus the greenback since Friday. The rapid intervention signals efforts from the city’s authorities to limit the local currency’s moves within its HK$7.75 to HK$7.85 per US dollar trading band. Heavy sales of the local dollar by
The Financial Supervisory Commission (FSC) yesterday met with some of the nation’s largest insurance companies as a skyrocketing New Taiwan dollar piles pressure on their hundreds of billions of dollars in US bond investments. The commission has asked some life insurance firms, among the biggest Asian holders of US debt, to discuss how the rapidly strengthening NT dollar has impacted their operations, people familiar with the matter said. The meeting took place as the NT dollar jumped as much as 5 percent yesterday, its biggest intraday gain in more than three decades. The local currency surged as exporters rushed to
RSS