The central bank on Thursday released the minutes of its Dec. 21 last year board meeting, revealing that most directors favored extending the “status quo,” but some floated the idea of a rate cut to stimulate GDP growth.
All members rallied behind the decision to leave interest rates unchanged after exchanging views, the 49-page report showed.
The bank’s policy-setting board includes 15 directors and five supervisors. The board of directors is the highest decisionmaking body, whereas the board of supervisors is authorized to examine the bank’s assets and liabilities, as well as audit its accounts.
The minutes showed that several directors and supervisors voiced support for a rate cut to help boost GDP growth, which has been modest in the past few years.
“Since the real interest rate in Taiwan is higher than the rate in most major economies, there seemed to be room for a rate cut,” the minutes quoted one director as saying, without identifying them.
Another director said that while the current situation warranted the extension of an interest rate hold, a rate cut could provide an economic boost, the minutes showed.
One supervisor said exploring the option of a rate cut might be harmless, considering the nation’s muted economic growth and positive real interest rates, the minutes showed.
However, another supervisor disagreed, saying that the timing was not right for a rate cut in light of increases in raw material prices.
“It is more appropriate to keep rates unchanged for now... Interest rate adjustments might be put on the table next year, depending on economic and financial developments at home and abroad,” the report quoted the supervisor as saying.
Commenting on rate hikes in the US, the UK and South Korea, several directors and supervisors expressed their view that Taiwan does not need to follow suit, given that its economic, financial and price conditions are different.
One director pointed out that the US was already close to full employment, whereas Taiwan’s output gap remained negative.
Taiwan has a mild inflation outlook, the same director said, adding that the nation has experienced an appreciation of the NT dollar and the ensuing financial tightening.
“A policy rate hike could result in further currency appreciation, and exchange rate movements have important effects on Taiwan’s economy,” the director said.
Central bank Governor Perng Fai-nan (彭淮南), who is to retire later this month after spending nearly two decades at the bank, made similar statements at a news conference following the December meeting.
The report said all board members eventually voted unanimously to keep the rediscount rate at 1.375 percent, the rate on accommodations with collateral at 1.75 percent and the rate on accommodations without collateral at 3.625 percent.
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