The central bank toughened its monetary policy yesterday, hiking its benchmark interest rate by 0.125 percentage points and ordering lenders to put aside more saving reserves in an attempt to curb inflation stoked by surging fuel, food and raw material prices.
It was the 16th consecutive quarter since October 2004 that the monetary regulator had adjusted raised the rates as it seeks to stabilize commodity prices without hurting efforts by the new government to shore up domestic demand and the economy.
“It is the central bank’s prime duty to maintain stability of consumer prices,” Governor Perng Fai-nan (彭淮南) told a news conference after a quarterly board meeting. “We have not stayed on the sidelines in the battle against inflation as some in the media have claimed.”
Perng said the central bank decided to raise the discount rate, at which local banks borrow 10-day loans from it, by 12.5 basis points to 3.625 percent, starting today.
Meanwhile, the rates on accommodations with collateral and without collateral will rise to 4 percent and 5.875 percent, respectively, up from their current 3.875 percent and 5.75 percent.
Perng said he hoped the adjustments could contain consumer price growth that reached 3.66 percent in the first five months of this year and is expected to advance further as utility costs are due to rise by 12.6 percent next month.
The central bank also required lenders to set aside more cash in reserves, lifting the ratio on passbook savings by 1.25 percentage points and term deposits by 0.75 points, beginning July 1, Perng said.
He added that the move, intended to check liquidity in the market, will not harm the economic stimulus package proposed by the Chinese Nationalist Party (KMT) administration to boost private consumption and investment.
However, Perng voiced reservations the spending program will push the GDP up to 4.78 percent for this year as the nation’s statistics agency has predicted.
The central bank put the figure at 4.66 percent, he said.
Also See: Central bank to continue fiscal tightening: analysts
RESPONSE: The transit sends a message that China’s alignment with other countries would not deter the West from defending freedom of navigation, an academic said Canadian frigate the Ville de Quebec and Australian guided-missile destroyer the Brisbane transited the Taiwan Strait yesterday morning, the first time the two nations have conducted a joint freedom of navigation operation. The Canadian and Australian militaries did not immediately respond to requests for comment. The Ministry of National Defense declined to confirm the passage, saying only that Taiwan’s armed forces had deployed surveillance and reconnaissance assets, along with warships and combat aircraft, to safeguard security across the Strait. The two vessels were observed transiting northward along the eastern side of the Taiwan Strait’s median line, with Japan being their most likely destination,
‘NOT ALONE’: A Taiwan Strait war would disrupt global trade routes, and could spark a worldwide crisis, so a powerful US presence is needed as a deterrence, a US senator said US Senator Deb Fischer on Thursday urged her colleagues in the US Congress to deepen Washington’s cooperation with Taiwan and other Indo-Pacific partners to contain the global security threat from China. Fischer and other lawmakers recently returned from an official trip to the Indo-Pacific region, where they toured US military bases in Hawaii and Guam, and visited leaders, including President William Lai (賴清德). The trip underscored the reality that the world is undergoing turmoil, and maintaining a free and open Indo-Pacific region is crucial to the security interests of the US and its partners, she said. Her visit to Taiwan demonstrated ways the
GLOBAL ISSUE: If China annexes Taiwan, ‘it will not stop its expansion there, as it only becomes stronger and has more force to expand further,’ the president said China’s military and diplomatic expansion is not a sole issue for Taiwan, but one that risks world peace, President William Lai (賴清德) said yesterday, adding that Taiwan would stand with the alliance of democratic countries to preserve peace through deterrence. Lai made the remark in an exclusive interview with the Chinese-language Liberty Times (sister paper of the Taipei Times). “China is strategically pushing forward to change the international order,” Lai said, adding that China established the Asia Infrastructure Investment Bank, launched the Belt and Road Initiative, and pushed for yuan internationalization, because it wants to replace the democratic rules-based international
WAR’S END ANNIVERSARY: ‘Taiwan does not believe in commemorating peace by holding guns,’ the president said on social media after attending a morning ceremony Countries should uphold peace, and promote freedom and democracy, President William Lai (賴清德) said yesterday as Taiwan marked 80 years since the end of World War II and the Second Sino-Japanese War. Lai, Vice President Hsiao Bi-khim (蕭美琴) and other top officials in the morning attended a ceremony at the National Revolutionary Martyrs’ Shrine in Taipei’s Zhongshan District (中山) to honor those who sacrificed their lives in major battles. “Taiwanese are peace-loving. Taiwan does not believe in commemorating peace by holding guns,” Lai wrote on Facebook afterward, apparently to highlight the contrast with the military parade in Beijing marking the same anniversary. “We
RSS