Thu, Feb 08, 2018 - Page 8 News List

New governor faces many trials

By Tu Jenn-hwa 杜震華

Third, the introduction of the “one fixed day off and one flexible rest day” rule and the government’s encouragement of wage increases have put pressure on commodity prices. Together with rising gasoline and natural gas prices, this is causing prices to go up.

Therefore, the new governor will face a more complicated issue regarding commodity prices: If the money supply is reduced to stabilize prices, increasing interest rates could have an impact on the weak economic upswing — in particular, housing prices, which have been driven down and further weaken the feeble economy.

The most worrisome aspect would be a repeat of the scenario where people were angry about the central bank’s decisionmaking, but did not dare speak up because of Perng’s strong response to criticism. Yang does not have the air of a proud winner who has received “A” grades for 14 consecutive years, so critics are likely to air their views regarding the bank’s policymaking.

If the central bank continues to shrink away from interacting with the outside world, it could face strong criticism.

Yang should consider establishing a platform for public interaction, such as holding monthly expert forums open to anyone, to give the public more information about the bank’s direction and operational strategies.

He could also hold an annual academic conference to provide a formal platform to discuss research results and deepen monetary policy research of currency policies, as well as the use of dual exchange rates.

Congratulations to Yang on his appointment. Hopefully Taiwan will see change.

Tu Jenn-hwa is a professor at Chinese Culture University’s English Program of Global Business.

Translated by Chang Ho-ming

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