South Korea’s central bank yesterday left its key interest rate unchanged at 2.25 percent for a third month, citing a possible global economic slowdown and tensions over international exchange rates.
Bank of Korea Governor Kim Choong-Soo and fellow policymakers again froze the benchmark seven-day repo rate, which was raised in July by 25 basis points from a record low.
The bank said in a statement the economy appears set to register “solidly based” growth in coming months, helped by brisk exports and increasing consumption and facilities investment, but risks remained.
“The possibility of a slowdown in the pace of economic recovery of major countries, change in the setting of global exchange rates and the fiscal problems of European countries will act as downside risk factors,” it said.
The reference to exchange rates was a new addition to the policy statement, amid heated currency disputes between the world’s leading economic powers.
China has come under repeated attack from the US and European nations, which say it is keeping the yuan artificially low to help exporters.
South Korea itself came in for criticism from Japan on Wednesday. Japanese Finance Minister Yoshihiko Noda told a parliamentary session in Tokyo that South Korea’s role as chair of next month’s G20 summit would be “seriously questioned” because of its “repeated interventions” to weaken the won.
Japanese Prime Minister Naoto Kan also called on China and South Korea to “act responsibly” and avoid pushing their currencies lower.
Kim said increased global foreign exchange volatility poses a potential threat to South Korea’s economy, and that was taken into account during the policy board meeting.
The central bank said inflation was likely to maintain an upward trend of above three percent on an annual basis, as demand-side pressures rise and international raw material prices increase.
It said the current account, the broadest measure of trade in goods and services, was expected to continue posting surpluses.
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
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)
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