The central bank yesterday kept its rediscount rate unchanged at 1.375 percent for the 14th consecutive quarter, saying there is still room for the nation’s economy to improve, as inflation remains benign.
The move was in line with the stance of major central banks, which have embarked on monetary easing to cushion the impact of the US-China trade dispute, geopolitical frictions and other downside risks.
“The negative output gap, which now stands at 0.34 percent, could widen to 0.42 percent next year,” bank Governor Yang Chin-long (楊金龍) told a news conference in Taipei after a board meeting.
Photo: CNA
The output gap — the difference between actual GDP and potential GDP — has topped the list of the bank’s concerns when it sets policy rates on a quarterly basis.
An accommodative monetary stance is warranted as the global economy remains fragile, Yang said.
The economic slowdown in China — which absorbs about 40 percent of Taiwanese exports — could worsen next year, despite a tentative trade agreement with the US, Yang said.
Taiwan should continue to benefit from trade rerouting and order transfers, with the nation’s GDP forecast to rise 2.6 percent this year and 2.57 percent next year, the governor said.
Both readings represent a modest upgrade from the bank’s projection three months earlier, but are less upbeat compared with the Directorate-General of Budget, Accounting, and Statistics’ forecasts of 2.64 percent growth this year and 2.72 percent next year.
“We are less optimistic about the size of private investment,” Yang said.
The governor confirmed that the bank had repeatedly intervened in the foreign-exchange market, often at the end of the trading session, to stem the pace of appreciation of the local currency.
It is the bank’s duty to maintain stability and order in the financial market, and intervention is sometimes necessary to achieve that goal, he said.
An influx of hot money has pushed the New Taiwan dollar up 3.83 percent against the US dollar since August, the bank’s data showed.
Yang added that property transactions have regained momentum, especially for residential housing in central and southern Taiwan, as well as for land and office prices nationwide.
Several board members shared the observation and local banks are generally positive about a continued recovery, Yang said.
However, the market has not evolved to such an extent that credit control measures are merited, he said.
The bank expects consumer prices to grow a mild 0.54 percent this year and climb to 0.77 percent next year, allowing room for monetary easing.
WEAK DEMAND: The chipmaker is to hold an investors’ conference next week, where it is expected to release detailed figures and field questions from shareholders Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday reported revenue of NT$508.63 billion (US$16.7 billion) for last quarter, falling short of its estimate after sluggish demand for 7-nanometer chips used in smartphones and computers drove down last month’s revenue to the weakest level in about 17 months. Revenue last month contracted 15.4 percent year-on-year and 10.9 percent month-on-month to NT$145.41 billion, the company said in a statement. Based on TSMC’s foreign exchange rate assumption of NT$30.7 per US dollar, last quarter’s revenue amounted to US$16.56 billion, lower than its estimated range of US$16.7 billion to US$17.5 billion. The world’s biggest contract chipmaker in January
NOT OUT YET: First-quarter exports contracted 19.2%, while imports fell 15.8%, both worse than a DGBAS forecast, indicating that markets have not recovered, an official said Exports last month fell 19.1 percent from a year earlier to US$35.2 billion, contracting for the seventh straight month, as demand for almost all products remained tepid without any sign of recovery in the near term, the Ministry of Finance said yesterday. The key economic gauge might register a drop of up to 20 percent this month and remain down through the third quarter, Department of Statistics Director-General Beatrice Tsai (蔡美娜) said. “Taiwan’s exports remain in a tunnel and might not see the light at the other end until the fourth quarter,” Tsai told a news conference, citing the Directorate-General of Budget,
Apple Inc assembled more than US$7 billion of iPhones in India last fiscal year, tripling production in the world’s fastest-growing smartphone arena after accelerating its move beyond China. The US company now makes almost 7 percent of its iPhones in India through expanding partners from Foxconn Technology Group (富士康科技集團) to Pegatron Corp (和碩), people familiar with the matter said. That is a significant leap for India, which accounted for an estimated 1 percent of the world’s iPhones in 2021. Apple is exploring ways to reduce its reliance on China as tensions between Washington and Beijing continue to escalate. Its longtime partners, who make most
FOR US$30,000: The firm plans to introduce up to two new models per year through its CDMS business model, as it targets a market segment with ‘massive volume’ Hon Hai Precision Industry Co (鴻海精密) is planning to introduce up to two electric vehicle (EV) models per year as it targets the mass market with retail prices of about US$30,000 per unit, the company said yesterday. The iPhone assembler set the goal as its EV plant in Ohio is to start mass production next year, giving it the capacity to build EVs for customers under the contract design and manufacturing services (CDMS) business model. “This [US$30,000 EV] is a segment with a massive volume. It is our priority to offer CDMS to tap into this segment,” Hon Hai spokesman James Wu
RSS