The Taiwan Association of Machinery Industry (TAMI, 台灣機械工業同業公會) yesterday said the government should keep depreciating the New Taiwan dollar against the US dollar in a bid to boost the nation’s export performance.
“The New Taiwan dollar should be depreciated to between NT$34 and NT$36 against the greenback, otherwise, it will be very tough for Taiwan’s industries to brace for the global economic downturn,” association chairman Alex Ko (柯拔希) told reporters on the sidelines of the association’s 70th anniversary celebrations in Taipei.
Ko said that the machinery industry is heavily influenced by tariffs and the fluctuation of foreign exchange rates, as local manufacturers ship 70 percent of their products abroad.
Photo: CNA
The production value of the industry totaled NT$985 billion (US$29.98 billion) last year, with export value growing 5 percent annually to US$21.59 billion last year, according to the association’s data.
“Exchange rates and tariffs were the main reasons for the annual production value of the industry failing to reach NT$1 trillion over the past few years,” Ko said.
Noting that Japan and South Korea are widely seen as the top competitors to Taiwan’s machinery industry, Ko said the yen has depreciated by more than 35 percent over the past few years.
South Korea’s won also depreciated 35 percent between November 2012 and the end of last year, he said.
In the first eight months of this year, the NT dollar depreciated 3.57 percent against the US dollar to an average of NT$31.24, the association’s statistics showed.
Ko said that while other countries are depreciating their currencies to overcome economic headwinds, the central government should follow the depreciation scale of Taiwan’s neighbors to stimulate the performance of exports.
“Do not let Taiwan’s machinery industry lose the competitive edge at the starting point,” Ko said.
The export value of the industry fell 3.4 percent annually to US$13.37 billion in the first eight months of this year, the association’s data showed.
The NT dollar dropped NT$0.17 against the US dollar to close at NT$32.856 in Taipei trading yesterday.
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