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
The paramount chief of a volcanic island in Vanuatu yesterday said that he was “very impressed” by a UN court’s declaration that countries must tackle climate change. Vanuatu spearheaded the legal case at the International Court of Justice in The Hague, Netherlands, which on Wednesday ruled that countries have a duty to protect against the threat of a warming planet. “I’m very impressed,” George Bumseng, the top chief of the Pacific archipelago’s island of Ambrym, told reporters in the capital, Port Vila. “We have been waiting for this decision for a long time because we have been victims of this climate change for
MASSIVE LOSS: If the next recall votes also fail, it would signal that the administration of President William Lai would continue to face strong resistance within the legislature The results of recall votes yesterday dealt a blow to the Democratic Progressive Party’s (DPP) efforts to overturn the opposition-controlled legislature, as all 24 Chinese Nationalist Party (KMT) lawmakers survived the recall bids. Backed by President William Lai’s (賴清德) DPP, civic groups led the recall drive, seeking to remove 31 out of 39 KMT lawmakers from the 113-seat legislature, in which the KMT and the Taiwan People’s Party (TPP) together hold a majority with 62 seats, while the DPP holds 51 seats. The scale of the recall elections was unprecedented, with another seven KMT lawmakers facing similar votes on Aug. 23. For a
Rainfall is expected to become more widespread and persistent across central and southern Taiwan over the next few days, with the effects of the weather patterns becoming most prominent between last night and tomorrow, the Central Weather Administration (CWA) said yesterday. Independent meteorologist Daniel Wu (吳德榮) said that based on the latest forecast models of the combination of a low-pressure system and southwesterly winds, rainfall and flooding are expected to continue in central and southern Taiwan from today to Sunday. The CWA also warned of flash floods, thunder and lightning, and strong gusts in these areas, as well as landslides and fallen
All 24 lawmakers of the main opposition Chinese Nationalists Party (KMT) on Saturday survived historical nationwide recall elections, ensuring that the KMT along with Taiwan People’s Party (TPP) lawmakers will maintain opposition control of the legislature. Recall votes against all 24 KMT lawmakers as well as Hsinchu Mayor Ann Kao (高虹安) and KMT legislative caucus whip Fu Kun-chi (傅崐萁) failed to pass, according to Central Election Commission (CEC) figures. In only six of the 24 recall votes did the ballots cast in favor of the recall even meet the threshold of 25 percent of eligible voters needed for the recall to pass,