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.
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)