The local business community aired grave concerns yesterday about a continuously rising New Taiwan dollar on fears that a rising local currency would hurt their business and urged the government to take actions
Roscher Lin (林秉彬), chairman of the National Association of Small and Medium Enterprises (中小企業協會), said firms are deeply worried about an appreciating NT dollar because “it would do much harm if the trend goes on.”
“If the NT dollar surges above the NT$30-mark against the US dollar, many of us would burst out crying,” he said. “How can local companies sustain such a rapid appreciation in such a short time if it continues moving toward the NT$30 level?”
Lin urged the government to “quickly do something to restrain the local currency’s appreciation and help Taiwan’s businesses.”
A mad movement of hot money was set off globally on Friday after the previous day the US Federal Reserves committed to buying US$600 billion in government bonds to bolster the US economy — the second such effort since the global financial crisis.
The NT dollar rose sharply by NT$0.503 against the greenback during the day’s session — the strongest rise compared with other Asian currencies, which broke the NT$30.219 key level recorded when President Ma Ying-jeou (馬英九) assumed office in 2008 — before closing at NT$30.56.
Preston Chen (陳武雄), chairman of the Chinese National Federation of Industries (全國工業總會), said a strong local currency “is very bad” for Taiwan’s export-oriented economy.
Meanwhile, Taiwan’s export-reliant businesses, were already complaining about the downside of a strong NT dollar.
A machinery tool manufacturer surnamed Lai warned the government that “a strong local currency will seriously jeopardize local businesses’ competitive edge, and it will be extremely hard to regain that.”
“I would shut down my business if the NT dollar rises above NT$30 against the dollar,” he joked. “It would be meaningless to go on for a slim marginal earning of just 4 or 5 percent.”
The scenario would be the same for local notebook contract makers whose third-quarter net profit margin already fell below 4 percent.
An executive of a major notebook maker admitted that a steeply rising currency is something they really fear because it would further cut slim net profits.
Meanwhile, Taiwan Textile Federation (TTF, 台灣紡拓會) Secretary-General Justin Huang (黃偉基) said it would be very difficult for the industry to resist the impact of such sharp fluctuations in the local currency’s valuation.
“The TTF would have to call a meeting to discuss feasible means to deal with the situation,” he added, urging the central bank to “strongly” intervene.
David Chen (陳文義), secretary-general of Taiwan Electrical and Electronics Manufacturers’ Association (台灣電機電子公會), was also concerned about the harm of the flood of speculative money.
“Taiwan’s businesses must take countermeasures to avoid a potential disaster,” Chen said.
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