The central bank's mild hikes in the nation's key interest rate increase yesterday suggested that the bank is not worried that a slower pace than the US's Federal Reserve would trigger massive outflows of foreign capital back to the US, analysts said yesterday.
The central bank yesterday announced it will increase Taiwan's benchmark interest rates by an eighth of a percentage point to 1.875 percent to curb inflation speculation, amid rising oil prices and possible increases in water and electricity costs later this year.
The central bank's decision yesterday was in line with market watchers' expectations.
"The central bank's decision matched our expectation as policy makers aim to curb speculation on higher consumer prices due to the rising cost of oil," said Citibank Taiwan vice president Cheng Cheng-mount (鄭貞茂).
"As inflation would not be a threat in the medium or longer term, we expect a more gradual rate hike," Cheng said.
The bank's interest rate hike yesterday was the monetary policy body's third straight hike since September last year. The central bank yesterday said Taiwan's consumer price index could rise above the government's previous forecast of 1.67 percent.
The bank's cautious move indicated that it is not worried about possible outflow of foreign capital after the US Federal Reserve raised US interest rates by a full quarter of a percentage point.
"Foreign investors have remitted a massive amount of capital into Taiwan this year," Cheng said.
Before yesterday's hikes, interest rates for six-month dollar deposits were 1.135 percent lower than that of US dollar deposits. Local lenders, including Taiwan Bank (台灣銀行), said they would hold on to deposit interest rates for one day on flush NT dollar liquidity.
Chou Ji (周濟), director of the private think-tank Chunghwa Institution for Economic Research, also said the central bank did not purport to stop further outflow of foreign funds.
If the central bank hopes to prevent further outflows of foreign funds, the rate hikes must be bigger than 0.25 percentage points, Chou said.
Kevin Chung (鐘國忠), an analyst with Jih Sun Securities Investment Consulting Co (日盛投顧), said overseas fund managers are diverting their funds away from Asian markets, including Taiwan, taking advantage of the widening interest rate gap between the US and Asian nations.
"But, foreign investors' moves will not send the local stock markets into a decline as the volume is quite small," he said.
As of yesterday, foreign investors sold a net NT$20.75 billion of local stocks since the beginning of March, compared to a net purchase of NT$114.48 billion in February.
Napoleon Osorio is proud of being the first taxi driver to have accepted payment in bitcoin in the first country in the world to make the cryptocurrency legal tender: El Salvador. He credits Salvadoran President Nayib Bukele’s decision to bank on bitcoin three years ago with changing his life. “Before I was unemployed... And now I have my own business,” said the 39-year-old businessman, who uses an app to charge for rides in bitcoin and now runs his own car rental company. Three years ago the leader of the Central American nation took a huge gamble when he put bitcoin
TECH RACE: The Chinese firm showed off its new Mate XT hours after the latest iPhone launch, but its price tag and limited supply could be drawbacks China’s Huawei Technologies Co (華為) yesterday unveiled the world’s first tri-foldable phone, as it seeks to expand its lead in the world’s biggest smartphone market and steal the spotlight from Apple Inc hours after it debuted a new iPhone. The Chinese tech giant showed off its new Mate XT, which users can fold three ways like an accordion screen door, during a launch ceremony in Shenzhen. The Mate XT comes in red and black and has a 10.2-inch display screen. At 3.6mm thick, it is the world’s slimmest foldable smartphone, Huawei said. The company’s Web site showed that it has garnered more than
CROSS-STRAIT TENSIONS: The US company could switch orders from TSMC to alternative suppliers, but that would lower chip quality, CEO Jensen Huang said Nvidia Corp CEO Jensen Huang (黃仁勳), whose products have become the hottest commodity in the technology world, on Wednesday said that the scramble for a limited amount of supply has frustrated some customers and raised tensions. “The demand on it is so great, and everyone wants to be first and everyone wants to be most,” he told the audience at a Goldman Sachs Group Inc technology conference in San Francisco. “We probably have more emotional customers today. Deservedly so. It’s tense. We’re trying to do the best we can.” Huang’s company is experiencing strong demand for its latest generation of chips, called
Vanguard International Semiconductor Corp (世界先進) and Episil Technologies Inc (漢磊) yesterday announced plans to jointly build an 8-inch fab to produce silicon carbide (SiC) chips through an equity acquisition deal. SiC chips offer higher efficiency and lower energy loss than pure silicon chips, and they are able to operate at higher temperatures. They have become crucial to the development of electric vehicles, artificial intelligence data centers, green energy storage and industrial devices. Vanguard, a contract chipmaker focused on making power management chips and driver ICs for displays, is to acquire a 13 percent stake in Episil for NT$2.48 billion (US$77.1 million).
RSS