The European Central Bank raised its key interest rate to 1.5 percent yesterday to dampen down inflation, even though the move will add pressure on debt-ridden economies on the fringes of the 17-nation eurozone.
The hike, the second this year, was widely expected in markets as the ECB focuses on its responsibility to get inflation, which is running at 2.7 percent, below its target of just below 2 percent.
Though higher rates may be necessary for a potentially overheating economy like Germany’s, they are likely to add to the growth concerns of some of the eurozone’s more indebted nations, such as Greece and Portugal.
The main focus in the markets was what ECB President Jean-Claude Trichet would say in his press briefing later yesterday regarding the outlook for the eurozone economy and Europe’s ongoing debt difficulties.
Markets were waiting to see if Trichet was as hawkish on inflation as he has been of late. Regarding Europe’s debt crisis, the focus was going to be on what he said about the situation in Greece and how it affects the ECB itself.
The bank has significant exposure to Greek debt since it accepts Athens’ bonds as collateral for loans that help keep the economy afloat. The ECB has repeatedly insisted that a default on those obligations is out of the question.
“Trichet might give markets some comfort by hinting that the ECB could continue to accept Greek debt as collateral for its loans to commercial banks even if the ratings agencies downgrade it to default status,” said Jennifer McKeown, senior European economist at Capital Economics.
“But he will stress that any roll-over of Greek government debt by the private sector will have to be deemed ‘purely voluntary’ by the ECB itself to gain its seal of approval,” McKeown added.
Earlier, the Bank of England held its base interest rate at an all-time low of 0.5 percent as the tepid economic recovery in Britain continues to outweigh concerns over inflation.
Yesterday’s decision by the nine-member Monetary Policy Committee to keep the rate unchanged for the 28th straight month was also anticipated in markets. Though inflation is 4.5 percent, many rate-setters think inflation will drop next year as the impact of rising energy costs drops out of annual comparisons.
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
RECORD-BREAKING: TSMC’s net profit last quarter beat market expectations by expanding 8.9% and it was the best first-quarter profit in the chipmaker’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which counts Nvidia Corp as a key customer, yesterday said that artificial intelligence (AI) server chip revenue is set to more than double this year from last year amid rising demand. The chipmaker expects the growth momentum to continue in the next five years with an annual compound growth rate of 50 percent, TSMC chief executive officer C.C. Wei (魏哲家) told investors yesterday. By 2028, AI chips’ contribution to revenue would climb to about 20 percent from a percentage in the low teens, Wei said. “Almost all the AI innovators are working with TSMC to address the
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”