Mon, Feb 25, 2013 - Page 1 News List

Perng reappointed as head of central bank

By Kevin Chen  /  Staff reporter

President Ma Ying-jeou (馬英九) has formally reappointed Perng Fai-nan (彭淮南) for a fourth five-year term as governor of the central bank, reassuring investors about the stability of most powerful monetary policy post in the country.

Perng, whose third term in office ends today, will continue for another five years from tomorrow through Feb. 25, 2018, the Presidential Office said in a press statement on Saturday.

Perng has headed the central bank since February 1998, taking over after former central bank governor Sheu Yuan-dong (許遠東) died in a plane crash in Dayuan (大園), Taoyuan County, in that year.

Over the past 15 years, Perng has used various monetary tools to fine-tune currency and interest rates in an effort to maintain stable domestic consumer prices and financial markets. He steered the nation through the 1997 to 1998 Asian financial crisis, as well as through the Sept. 21, 1999, earthquake, the democratic transition in 2000 and the 2008 to 2009 global financial crisis.

The central bank lowered its discount rate on 15 consecutive occasions during Perng’s first term, when the nation’s economy was hit by the bursting of the global dotcom bubble in 2000.

During his second term in 2003, the central bank raised its key interest rates 11 times in a row to ward off potential global inflationary pressure. It also cut rates seven straight times from 2008 to 2009 to shore up the economy during the global financial crisis.

To curb the real-estate speculation that has driven housing prices sharply higher in some major cities, especially Taipei, Perng introduced selective credit control measures in 2010, making him the most powerful government figure on housing issues.

Last year, Global Finance magazine rated Perng among the world’s best central bank governors for the eighth straight year. He is the only central banker to have received an “A” rating nine times by the New York-based magazine.

Even so, as central banks in economically advanced countries — especially Japan, Europe and the US — pursue aggressive monetary easing to boost their economies, the issue of hot money and depreciation pressures on Asian currencies, including the New Taiwan dollar, will be important issues facing Perng in his new term.

If the 74-year-old can complete his fourth term as governor, which looks likely, given his robust health, Perng will become the nation’s longest-serving central bank governor, ahead of former premier Yu Kuo-hwa (俞國華), who served as the central bank governor between 1969 and 1984.

Perng’s reappointment should come as no surprise to market watchers because he has no obvious successor.

On Feb. 1, local media cited sources at the Presidential Office and Legislative Yuan as saying that Perng would continue for another five years as the top monetary policymaker.

Despite his links with the Chinese Nationalist Party (KMT), Perng also enjoys widespread respect from major figures in the Democratic Progressive Party (DPP).

In late 2011, former DPP chairperson Tsai Ing-wen (蔡英文) was reportedly considering asking Perng to be her running mate in last year’s presidential election, but Perng immediately denied he would run, saying that his current job would be his last post as a public servant.

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