The central bank yesterday said the New Taiwan dollar has been more stable than the South Korean won over the past three-and-a-half years, which has helped local exporters to reduce foreign exchange risk.
The comments came after Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) chairman Morris Chang (張忠謀) last Friday criticized government agencies, including the central bank, of not doing enough to protect local companies from the impact of strong NT dollar gains against the US dollar.
In response, the central bank said in an e-mailed statement that it was not allowed to control the foreign exchange rate and that the bank opted for the policy of keeping the local currency at a managed floating rate.
In the more than three years since Dec. 31, 2007, the NT dollar’s fluctuation rate against the greenback was 4.15 percent, much tamer than the won’s rate of 14.51 percent, the statement said.
As the won’s fluctuation rate was 3.5 times higher than that of the NT dollar, Taiwanese firms in fact enjoyed lower currency exchange risks and that boosted their export business, the central bank said.
Chang said the foreign -exchange rate could make or break a company.
He said the South Korean government had done a better job in capping the appreciation of the won against the US dollar to protect its companies over the past year.
“As Taiwanese exporters book costs in New Taiwan dollars, the foreign exchange rate can affect their competitiveness,” Chang said.
The Japanese government has also sought to ease the strains of a strong yen recently, not to mention Beijing’s tough stance on keeping the yuan steady even under massive pressure from the US, Chang said.
Taiwan and South Korea -are competitors in similar categories of export products, and the central bank said it understood the concerns of Taiwanese companies, but said it could not manipulate the NT dollar because it had adopted a “managed floating” mechanism.
Taiwan and South Korea are long-time rivals in the technology field.
South Korean bigwigs such as Samsung Electronics Co and LG Electronics Inc manufacture products from handsets and LCD panels to chips and computers, products that are also manufactured by Taiwanese firms, including TSMC, HTC Corp (宏達電) and Acer Inc (宏碁).
Although a stronger NT dollar can impact companies’ profitability, on the other hand, Taiwan enjoys imported goods at a cheaper rate and that helps stabilize prices of domestic consumables, the statement said.
Taiwan’s Consumer Price Index (CPI) expanded 1.43 percent during the January to July period, compared to South Korea’s 4.4 percent, according to central bank statistics.
Taiwan’s CPI climbed 0.96 percent last year, while South Korea’s advanced 2.93 percent. In 2009, Taiwan’s CPI contracted 0.87 percent, but South Korea’s rose 2.83 percent.
The central bank said it would closely monitor the currency fluctuation, but intervention would only come when there are abnormalities such as huge capital inflow or outflow in the market that sends the NT dollar soaring or dropping on a great level.
Starlux Airlines Co (星宇航空) today unveiled a long-haul network expansion plan at a shareholders’ meeting in Taipei, including direct flights to Barcelona, Spain, and Zurich, Switzerland, as well as a service connecting Taipei, Sydney and New Zealand. Starlux is to become the first Taiwanese carrier to offer non-stop services to the two European cities, while the inaugural oceanic route is expected to expand transit opportunities within the Australia-New Zealand market, Starlux said. Flight services to Chicago, Dallas, Washington and New York are under evaluation, the airline added. Prior to the shareholders’ meeting, the airline earlier this year announced that it would be
Netherlands-based semiconductor equipment supplier ASML Holding NV yesterday said that it is planning to hire an additional 1,000 people in Taiwan this year in response to growing demand from clients. ASML had previously planned to recruit 600 people this year, but that the plan has been adjusted upward, ASML vice president and ASML Taiwan general manager Grace Wang (汪佳慧) told reporters. ASML has a workforce of more than 4,500 in Taiwan, accounting for about 10 percent of its global total, Wang said. This year’s recruitment campaign would focus on adding people in the customer support, manufacturing and supply chain domains to assist ASML
Cairo’s new monorail slices across the city skyline, running above the familiar chaos of blaring horns and aging buses’ exhaust fumes that mark rush hour below. The US$4.5 billion monorail, opened this month, is among Egypt’s most prominent new transport projects, part of a debt-funded infrastructure drive criticized for sapping state finances while bringing limited benefits to most of the country’s 109 million people. “It feels like you’re in a different country,” said Ramy Sayed, a restaurant manager, aboard a driverless Innovia 300 train. “No noise, no traffic, we’re not used to this.” The eastern line runs 56km from the bustling middle-class
UNDER MICROSCOPE: Taiwan detained three people who allegedly conspired to buy servers in Taiwan and export them using fraudulent documentation, prosecutors said Nvidia Corp chief executive officer Jensen Huang (黃仁勳) on Saturday urged Super Micro Computer Inc to tighten up on compliance after Taiwan detained three people this week for allegedly making fraudulent declarations about artificial intelligence (AI) servers made by its US partner. The development marked the nation’s first crackdown on semiconductor smuggling, which grew after the US slapped restrictions on exports of high-end chips such as Nvidia AI accelerators to China. Nvidia is “rigorous” in explaining regulations to all of its partners, Huang told reporters after arriving in Taipei. “Ultimately Super Micro has to run their own company,” he said in response to
RSS