Growth of the nation’s money supply was slower last month than the previous month, reflecting a weaker stock market and the continuing outflow of net foreign capital, the central bank said in a statement released yesterday.
As one of the measures of monetary aggregates showed the lowest growth in seven years and signaled that weak investor sentiment had dealt a serious blow to local equities, economists said the central bank might avoid aggressive interest rate hikes at its next board meeting in September.
The M2 money supply indicator rose 1.7 percent last month from a year earlier, after the broadest measure of the nation’s monetary aggregates grew 2.34 percent in May, the central bank’s latest tallies showed.
M1B, another money supply gauge that includes currency held by the public and deposit money, registered a 3.04 percent decline last month from a year earlier, following a drop of 1.14 percent in the previous month.
M2 includes M1B, time deposits, time savings deposits, foreign currency deposits and mutual funds.
The central bank’s data indicated that the decline in the M1B last month was the weakest since July 2001, indicating that a substantial amount of capital had been moved from stocks after the benchmark TAIEX dropped 1,095.54 points, or 12.71 percent, within a month.
“The deceleration was the result of light trading volume in the equity market and continuous net outflow of foreign investors,” Cheng Cheng-mount (鄭貞茂) and Tina Liao, economists at Citi Investment Research, wrote in a research note released yesterday. “M1B growth in particular has reached a seven-year low.”
For the first half of the year, M2 supply grew 1.73 percent year-on-year, while M1B rose 1.44 percent over the same period, the bank’s data showed.
Neither last month’s M2 growth rate nor that for the first half fell within the central bank’s target range of 2 percent to 6 percent, even though the monetary authority decided last month at its quarterly board meeting to lower its growth target from between 3 percent and 7 percent — set earlier this year— to reflect the liquidity situation.
Commenting on the latest money supply data, both Cheng and Liao said that rising inflation and slower money growth momentum would leave the central bank little room for further rate hikes.
“We expect just one more rate hike in September. Negative M1B growth suggested domestic investors were still cautious about the equity outlook and would rather save their money in time deposits,” they wrote.
Quanta Computer Inc (廣達) chairman Barry Lam (林百里) is expected to share his views about the artificial intelligence (AI) industry’s prospects during his speech at the company’s 37th anniversary ceremony, as AI servers have become a new growth engine for the equipment manufacturing service provider. Lam’s speech is much anticipated, as Quanta has risen as one of the world’s major AI server suppliers. The company reported a 30 percent year-on-year growth in consolidated revenue to NT$1.41 trillion (US$43.35 billion) last year, thanks to fast-growing demand for servers, especially those with AI capabilities. The company told investors in November last year that
Intel Corp has named Tasha Chuang (莊蓓瑜) to lead Intel Taiwan in a bid to reinforce relations between the company and its Taiwanese partners. The appointment of Chuang as general manager for Intel Taiwan takes effect on Thursday, the firm said in a statement yesterday. Chuang is to lead her team in Taiwan to pursue product development and sales growth in an effort to reinforce the company’s ties with its partners and clients, Intel said. Chuang was previously in charge of managing Intel’s ties with leading Taiwanese PC brand Asustek Computer Inc (華碩), which included helping Asustek strengthen its global businesses, the company
Taiwanese suppliers to Taiwan Semiconductor Manufacturing Co. (TSMC, 台積電) are expected to follow the contract chipmaker’s step to invest in the US, but their relocation may be seven to eight years away, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. When asked by opposition Chinese Nationalist Party (KMT) Legislator Niu Hsu-ting (牛煦庭) in the legislature about growing concerns that TSMC’s huge investments in the US will prompt its suppliers to follow suit, Kuo said based on the chipmaker’s current limited production volume, it is unlikely to lead its supply chain to go there for now. “Unless TSMC completes its planned six
TikTok abounds with viral videos accusing prestigious brands of secretly manufacturing luxury goods in China so they can be sold at cut prices. However, while these “revelations” are spurious, behind them lurks a well-oiled machine for selling counterfeit goods that is making the most of the confusion surrounding trade tariffs. Chinese content creators who portray themselves as workers or subcontractors in the luxury goods business claim that Beijing has lifted confidentiality clauses on local subcontractors as a way to respond to the huge hike in customs duties imposed on China by US President Donald Trump. They say this Chinese decision, of which Agence
RSS