Central bank governor Perng Fai-nan (彭淮南) said yesterday that a housing bubble is not imminent, as property price hikes are limited to certain areas, adding that the bank has adopted “targeted prudential measures” to curb real-estate speculation. Among these measures, Perng said that state-owned banks have done “very well” in improving their risk controls for home mortgages at the prompting of the central bank.
“A majority of banks have lowered their loan-to-value ratios for home investors from 80 percent to 70 percent, with mortgage interest rates rising between 0.25 percentage points and 0.5 percentage points,” Perng said during a legislative session yesterday. “Some banks have even shortened or canceled grace periods for home loan repayments.”
However, he stressed that the measures that banks have adopted to tighten credit are selective and therefore would not affect the general public.
Other countries in Asia have imposed transaction taxes on home purchases, Perng said.
“In Singapore, a stamp tax of 3 percent is imposed on houses sold within one year of purchase. In Hong Kong, a stamp tax on luxury homes worth more than HK$20 million [US$2.58 million] has been raised to 4.25 percent, up from 3.75 percent,” he said.
Bombarded with questions from legislators across party lines as to whether the central bank would raise interest rates this quarter, Perng remained tight-lipped, saying that it will be decided at the bank’s next policy meeting, scheduled for next Thursday.
Amid growing public demand for Chinese currency, Perng said that negotiations on cross-strait currency settlement have “gone smoothly,” and that he expected that banks on both sides of the Taiwan Strait would soon be able to directly settle currency transactions.
“There is no need to include this matter in an economic cooperation framework agreement [ECFA] with China,” Perng said, adding that the issue will hopefully be finalized before the signing of the cross-strait trade pact.
The central bank has also closely monitored capital inflows to the nation to determine whether they are being used for their declared purposes to invest in local shares and bonds.
Perng said that in the past 14 months, the aggregate amount of foreign capital coming in and out of the nation was US$290 billion. Out of a total of 5,000 foreign accounts, only 20 accounted for 40 percent of this capital.
The central bank will pay close attention to these 20 accounts as they are “the sources of the so-called hot money,” Perng said, adding that around NT$250 billion has yet to be invested in the equity market.
Perng said that the amount of cash in foreign capital used to borrow securities has surged from 20 percent to 93 percent recently, which merits particular attention.
Asked whether borrowing securities is considered an investment in the stock market, Perng said that the central bank is in the process of consulting with the Financial Supervisory Commission.
ISSUES: Gogoro has been struggling with ballooning losses and was recently embroiled in alleged subsidy fraud, using Chinese-made components instead of locally made parts Gogoro Inc (睿能創意), the nation’s biggest electric scooter maker, yesterday said that its chairman and CEO Horace Luke (陸學森) has resigned amid chronic losses and probes into the company’s alleged involvement in subsidy fraud. The board of directors nominated Reuntex Group (潤泰集團) general counsel Tamon Tseng (曾夢達) as the company’s new chairman, Gogoro said in a statement. Ruentex is Gogoro’s biggest stakeholder. Gogoro Taiwan general manager Henry Chiang (姜家煒) is to serve as acting CEO during the interim period, the statement said. Luke’s departure came as a bombshell yesterday. As a company founder, he has played a key role in pushing for the
China has claimed a breakthrough in developing homegrown chipmaking equipment, an important step in overcoming US sanctions designed to thwart Beijing’s semiconductor goals. State-linked organizations are advised to use a new laser-based immersion lithography machine with a resolution of 65 nanometers or better, the Chinese Ministry of Industry and Information Technology (MIIT) said in an announcement this month. Although the note does not specify the supplier, the spec marks a significant step up from the previous most advanced indigenous equipment — developed by Shanghai Micro Electronics Equipment Group Co (SMEE, 上海微電子) — which stood at about 90 nanometers. MIIT’s claimed advances last
EUROPE ON HOLD: Among a flurry of announcements, Intel said it would postpone new factories in Germany and Poland, but remains committed to its US expansion Intel Corp chief executive officer Pat Gelsinger has landed Amazon.com Inc’s Amazon Web Services (AWS) as a customer for the company’s manufacturing business, potentially bringing work to new plants under construction in the US and boosting his efforts to turn around the embattled chipmaker. Intel and AWS are to coinvest in a custom semiconductor for artificial intelligence computing — what is known as a fabric chip — in a “multiyear, multibillion-dollar framework,” Intel said in a statement on Monday. The work would rely on Intel’s 18A process, an advanced chipmaking technology. Intel shares rose more than 8 percent in late trading after the
GLOBAL ECONOMY: Policymakers have a choice of a small 25 basis-point cut or a bold cut of 50 basis points, which would help the labor market, but might reignite inflation The US Federal Reserve is gearing up to announce its first interest rate cut in more than four years on Wednesday, with policymakers expected to debate how big a move to make less than two months before the US presidential election. Senior officials at the US central bank including Fed Chairman Jerome Powell have in recent weeks indicated that a rate cut is coming this month, as inflation eases toward the bank’s long-term target of two percent, and the labor market continues to cool. The Fed, which has a dual mandate from the US Congress to act independently to ensure