The US central bank’s announcement that it will terminate its quantitative easing measures by the end this month will have only a minor impact on Taiwan’s economy, because it was in line with market expectations, the National Development Council (NDC) said yesterday.
Starting in January, the US Federal Reseve cut its bond-buying scheme by US$10 billion every month throughout the year, from US$85 billion.
The Fed’s announcement on Wednesday was long expected, NDC Director Wu Ming-huei (吳明蕙) said at a press conference.
Wu said the market had already reacted to the Fed’s tapering plan in May and June last year, when stock market of many emerging economies, including Russia, Indonesia and Turkey, plummeted as money exited these countries.
Citing the IMF’s studies, Wu said that only countries with unstable stock markets or high levels of foreign debt would suffer from the tapering plan, and Taiwan is not one of them.
Therefore, the end to the Fed’s quantitative easing is not likely to cause any significant money outflows for Taiwan, Wu said.
The end of the Fed’s bond-buying will also not cool down the economic momentum in the US as the Fed has been conducting its tapering in a gradual way, she said. On the other hand, the withdrawal of quantitative easing does not indicate any tightening of liquidity or any interest rate hike in the short term, Wu said.
The action proves that the economy in the US is strong, which will benefit Taiwan’s exports, she said.
“Rather, we would be worried if the Fed did not want to terminate the policy as it planned,” she added.
However, Gordon Sun (孫明德), director of the macroeconomic forecasting center for the Taiwan Institute of Economic Research (TIER, 台灣經濟研究院), said the talks about quantitative easing termination would still affect the stock market and foreign exchange market in Taiwan, as indicated by the decline in the TAIEX that started last month.
While the Fed said in a statement that it will continue to keep its key interest rates unchanged “for a considerable time,” there is speculation that the US central bank may raise its interest rate by the end of the third quarter next year at the earliest.
“Such speculation has caused money to move into the bond market in the US from other countries,” Sun said.
As money flows to the US, there will be pressure for the New Taiwan dollar to depreciate against the US dollar, he said.
However, the depreciation of the New Taiwan dollar against the US dollar will not benefit Taiwan’s exports because Japan, Europe, China and other emerging economies will still maintain an expansionary monetary policy to boost their economies, Sun said.
Outflows in Europe are likely to increase the burden for the area to fight deflation, and if the economy in Europe worsens next year, it might hurt Taiwan’s exports of electronics devices, information and communications technology products and automobile parts, Sun said. Exports to Europe account for 10 percent of Taiwan’s total exports, he added.
The Eurovision Song Contest has seen a surge in punter interest at the bookmakers, becoming a major betting event, experts said ahead of last night’s giant glamfest in Basel. “Eurovision has quietly become one of the biggest betting events of the year,” said Tomi Huttunen, senior manager of the Online Computer Finland (OCS) betting and casino platform. Betting sites have long been used to gauge which way voters might be leaning ahead of the world’s biggest televised live music event. However, bookmakers highlight a huge increase in engagement in recent years — and this year in particular. “We’ve already passed 2023’s total activity and
BIG BUCKS: Chairman Wei is expected to receive NT$34.12 million on a proposed NT$5 cash dividend plan, while the National Development Fund would get NT$8.27 billion Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, yesterday announced that its board of directors approved US$15.25 billion in capital appropriations for long-term expansion to meet growing demand. The funds are to be used for installing advanced technology and packaging capacity, expanding mature and specialty technology, and constructing fabs with facility systems, TSMC said in a statement. The board also approved a proposal to distribute a NT$5 cash dividend per share, based on first-quarter earnings per share of NT$13.94, it said. That surpasses the NT$4.50 dividend for the fourth quarter of last year. TSMC has said that while it is eager
‘IMMENSE SWAY’: The top 50 companies, based on market cap, shape everything from technology to consumer trends, advisory firm Visual Capitalist said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) was ranked the 10th-most valuable company globally this year, market information advisory firm Visual Capitalist said. TSMC sat on a market cap of about US$915 billion as of Monday last week, making it the 10th-most valuable company in the world and No. 1 in Asia, the publisher said in its “50 Most Valuable Companies in the World” list. Visual Capitalist described TSMC as the world’s largest dedicated semiconductor foundry operator that rolls out chips for major tech names such as US consumer electronics brand Apple Inc, and artificial intelligence (AI) chip designers Nvidia Corp and Advanced
Pegatron Corp (和碩), an iPhone assembler for Apple Inc, is to spend NT$5.64 billion (US$186.82 million) to acquire HTC Corp’s (宏達電) factories in Taoyuan and invest NT$578.57 million in its India subsidiary to expand manufacturing capacity, after its board approved the plans on Wednesday. The Taoyuan factories would expand production of consumer electronics, and communication and computing devices, while the India investment would boost production of communications devices and possibly automotive electronics later, a Pegatron official told the Taipei Times by telephone yesterday. Pegatron expects to complete the Taoyuan factory transaction in the third quarter, said the official, who declined to be
RSS