The central bank yesterday sold NT$30 billion (US$95.6 million) in 182-day treasury bills at a yield of 0.55 percent — higher than the 0.5 percent recorded in April’s sales of such bills but lower than the 0.77 percent yield for 182-day certificates of deposit (CD) that were also sold yesterday — indicating that the banking system remains awash in liquidity.
The central bank, which was commissioned by the Ministry of Finance to auction the bills, said that the sale of the 182-day treasury bills maturing on March 30 next year attracted 2.9 times the amount of notes on offer. That compares with 6.73 times the sales of 182-day bonds on April 1.
The bank also said on its Web site that it sold a total of NT$76.8 billion in CDs yesterday, more than the NT$35.1 billion that matured.
PUBLIC DEBT
Proceeds from the auction of treasury bills will be used to help state coffers meet short-term capital needs and finance the government’s debt, the ministry said.
The result of the sales of treasury bills and CDs, coupled with the release on Monday of data showing record-high housing and construction loans last month, is further evidence of excess liquidity that could impact asset prices and may influence the bank when it holds its quarterly policy meeting tomorrow.
“Inflation is not a great concern for Taiwan at the moment and the key is to normalize monetary policy settings to prevent excess credit from creating asset price bubbles,” Tine Olsen, an economist at Moody’s Economy.com in Sydney, said in an e-mailed statement yesterday.
On Monday, the central bank said in a statement that the nation’s outstanding loans for home purchases reached a record level of NT$5.054 trillion. What was worth noticing, however, was that loans offered by local lenders to construction companies totaled NT$1.17 trillion last month, up NT$27.659 billion from the previous month and representing the largest monthly increase so far this year.
Olsen said Taiwan’s recent unemployment and industrial production data paint a rosy picture for the country’s economy and thus warrant another interest rate hike this time.
SMALL INCREASE
“We expect the monetary policy board to raise the discount rate by 12.5 basis points, taking it to 1.5 percent,” she said.
Olsen said if the central bank were to raise its key interest rate, “the rate will still be expansionary and supportive of the real economy, but the central bank is winding back some of its stimulus to prevent overheating.”
BUSINESS UPDATE: The iPhone assembler said operations outlook is expected to show quarter-on-quarter and year-on-year growth for the second quarter Hon Hai Precision Industry Co (鴻海精密) yesterday reported strong growth in sales last month, potentially raising expectations for iPhone sales while artificial intelligence (AI)-related business booms. The company, which assembles the majority of Apple Inc’s smartphones, reported a 19.03 percent rise in monthly sales to NT$510.9 billion (US$15.78 billion), from NT$429.22 billion in the same period last year. On a monthly basis, sales rose 14.16 percent, it said. The company in a statement said that last month’s revenue was a record-breaking April performance. Hon Hai, known also as Foxconn Technology Group (富士康科技集團), assembles most iPhones, but the company is diversifying its business to
ARTIFICIAL INTELLIGENCE: The chipmaker last month raised its capital spending by 28 percent for this year to NT$32 billion from a previous estimate of NT$25 billion Contract chipmaker Powerchip Semiconductor Manufacturing Corp (力積電子) yesterday launched a new 12-inch fab, tapping into advanced chip-on-wafer-on-substrate (CoWoS) packaging technology to support rising demand for artificial intelligence (AI) devices. Powerchip is to offer interposers, one of three parts in CoWoS packaging technology, with shipments scheduled for the second half of this year, Powerchip chairman Frank Huang (黃崇仁) told reporters on the sidelines of a fab inauguration ceremony in the Tongluo Science Park (銅鑼科學園區) in Miaoli County yesterday. “We are working with customers to supply CoWoS-related business, utilizing part of this new fab’s capacity,” Huang said, adding that Powerchip intended to bridge
Qualcomm Inc, the world’s biggest seller of smartphone processors, gave an upbeat forecast for sales and profit in the current period, suggesting demand for handsets is increasing after a two-year slump. Revenue in the three months ended in June will be US$8.8 billion to US$9.6 billion, the company said in a statement Wednesday. Excluding certain items, earnings will be US$2.15 to US$2.35 a share. Analysts had projected sales of US$9.08 billion and earnings of US$2.16 a share. The outlook signals that the smartphone market has begun to bounce back, tracking with Qualcomm’s forecast that demand would gradually recover this year. The San
Clambering hand-over-hand, sweat dripping into his eyes, a durian laborer expertly slices a cumbersome fruit from a tree before tossing it down to land with a soft thump in his colleague’s waiting arms about 15m below. Among Thailand’s most famous and lucrative exports, the pungent “king of fruits” is as distinctive in its smell as its spiky green-brown carapace, and has been farmed in the kingdom for hundreds of years. However, a vicious heat wave engulfing Southeast Asia has resulted in smaller yields and spiraling costs, with growers and sellers increasingly panicked as global warming damages the industry. “This year is a crisis,”