European Central Bank (ECB) President Jean-Claude Trichet rose to the defense of the euro yesterday, describing it as a “credible” currency that was not in crisis.
“I think that we have to see that we have a currency that is credible,” Trichet told RTL radio a day after the ECB backed an extension in special measures to tackle eurozone debt pressures. “There is no crisis for the euro as a currency. We have problems of financial instability that are the result of budget crises in certain European countries.”
The bank on Thursday left its key interest rate at a record low of 1 percent, but said it would extend cheap emergency funding for the commercial banks through the first quarter of next year.
Crucially, the ECB also said it would continue to buy government bonds to help ease pressure on a growing list of financially vulnerable eurozone countries — Belgium, Greece, Ireland, Italy, Portugal and Spain — but gave no indication it would increase its purchases.
Trichet said yesterday the decision to leave interest rates unchanged at 1 percent “is what we think is necessary to continue to provide our fellow citizens ... price stability, which is our mandate.”
While the ECB announced it would keep buying government bonds, a key part of its stimulus measures to support indebted eurozone nations and fight the debt crisis, the chief of the IMF said on Thursday the debt crisis in Europe remained serious, but he tipped Ireland to recover rapidly after its weekend bailout.
On Sunday, the EU and the IMF announced an 85 billion euro (US$111 billion) rescue package for Ireland to shore up its banking sector and enable the country to meet its debt obligations.
“The crisis in Europe is still strong” with Ireland and Greece “at the edge of a cliff” and some other nations are “not far from the edge of the cliff,” IMF managing director Dominique Strauss-Kahn told reporters in New Delhi.
However, the Irish rescue “should fix the problems” and the country’s economy “will come back on track rather rapidly,” he said, adding the IMF stood poised to assist other nations if needed.
STAYING AHEAD: Fitch said that TSMC remains technologically ahead of others, but Samsung is building a new chip fab, while China is investing in its domestic industry As escalating US-China tensions and COVID-19-related production disruptions force US technology supply chains to transform, Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) US$12 billion chip fabrication plant in Arizona would be key to spurring greater US production of core semiconductor components, Fitch Ratings said. “We view the US-TSMC alliance as a first step in building a more autonomous US technology supply chain, given high barriers to entry, specifically related to the significant capital and design capability required for leading-edge semiconductor manufacturing,” Fitch said in a statement on Tuesday. “By working with TSMC, US chipmakers will not face the financial burden of incremental investment
DIVERSIFICATION: Although COVID-19 would push more companies to produce in emerging markets, DBS said that it was unlikely that firms would totally leave China Geopolitical tensions and supply disruptions are expected to accelerate the migration of manufacturing out of China, as concerns about the risk of production concentrated in one country increase, S&P Global Ratings said. Although its economic expansion might be weaker than previous levels due to the accelerated relocation of manufacturing, China’s economic growth would still be stronger than that of most other economies, the ratings agency said. “While absolute growth rates will moderate, we believe China’s economic performance will continue to be a key sovereign credit support,” S&P Global Ratings credit analyst Tan Kim Eng (陳錦榮) said in a statement on Thursday. “Its growth
Taiwan’s corporate landscape has changed significantly over the past 20 years, with Hon Hai Precision Industry Co (鴻海精密) replacing Formosa Plastics Corp (台塑) as the revenue leader, while Taiwan Semiconductor Manufacturing Co. (TSMC, 台積電) has emerged as the most profitable firm, a survey of Taiwan’s 50 largest companies published on Tuesday last week showed. The Chinese-language CommonWealth Magazine survey ranked Taiwan’s 50 largest companies based on their revenue last year, and compared them with the results of a similar survey it conducted in 2000. Only 33 companies on the original list remained in this year’s rankings, the survey found, following two
GEOPOLITICAL RISKS: Beijing announced plans to strengthen ‘enforcement’ in Hong Kong, sparking losses across Asia led by the Hang Seng’s 5.6 percent plunge Local shares on Friday ended sharply lower amid renewed tensions between the US and China over Chinese telecommunications equipment giant Huawei Technologies Co Ltd (華為) and China’s plan to introduce a national security law in Hong Kong. The TAIEX on Friday finished down 197.16, or 1.79 percent, at 10,811.15 on turnover of NT$177.183 billion (US$5.9 billion), almost flat from a close of 10,814.92 on May 15. The market was down across all major sectors, in particular electronics shares, which finished down 1.99 percent from Thursday’s close. Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest wafer foundry and a chip supplier