Thu, Oct 26, 2017 - Page 12 News List

Central bank Governor reaffirms his retirement

BALANCE:A ban passed in 1997 on local banks selling non-delivery forward contracts has allowed the central bank to help stabilize the currency and economy, Perng Fai-nan said

By Crystal Hsu  /  Staff reporter

In what is expected to be his final speech to the legislature’s Finance Committee, central bank Governor Perng Fai-nan (彭淮南) yesterday reiterated his intention to retire in February next year and took solace in Taiwan’s avoidance of two financial crises during his tenure.

The 78-year-old governor said he would retire when his term expires in February next year after more than 40 years of public service and 20 years as the nation’s top monetary policymaker.

Perng refused to comment on potential candidates to fill his vacancy, saying it is up to President Tsai Ing-wen (蔡英文) to name his successor.

He nodded in agreement when lawmakers said the next governor must possess professional prowess, moral integrity and diligence.

Prospective candidates include central bank Deputy Governor Yang Chin-long (楊金龍), former deputy governor Shea Jia-dong (許嘉棟) and Nomura Research Institute (野村綜合研究所) chief economist Richard Koo (辜朝明), who is the son of presidential adviser and Taiwanese independence advocate Koo Kwang-ming (辜寬敏).

“I took comfort in the fact that two recent global financial crises had a relatively small impact on Taiwan,” Perng said when asked to name his greatest achievements in office.

Under his stewardship, the central bank has kept the New Taiwan dollar dynamically stable against the US currency in which many Taiwanese exporters settle accounts with clients overseas.

To that end, Perng said he will not allow local banks to sell non-delivery forward (NDF) contracts, because currency speculators tend to use the tool to manipulate foreign-exchange markets.

The ban introduced during the 1997 regional financial storm has allowed the central bank to help stabilize the local currency and the economy as a whole, he said.

The NT dollar slipped from NT$28 to NT$35 at that time with foreign-exchange reserves shrinking to US$90 billion, compared with US$447.21 billion last month, Perng said, dismissing suggestions that Taiwan does not need to worry about currency speculation given its ample foreign reserves.

The central bank has allowed offshore banking units to operate NDF business and firms can find other hedging tools, he said.

Perng voiced support for integration of the banking industry, especially for state-owned Bank of Taiwan (台銀), Land Bank of Taiwan (土銀) and The Export-Import Bank (輸出入銀行), saying that they should be given greater flexibility to adjust their scale to optimal levels.

Hopefully, local lenders can become more competitive through consented integration, because over-banking has caused many to underperform in terms of financial proficiency over the years, Perng said.

This story has been viewed 2416 times.

Comments will be moderated. Remarks containing abusive and obscene language, personal attacks of any kind or promotion will be removed and the user banned.

TOP top