The central bank yesterday kept its policy interest rate unchanged at a record low of 1.125 percent, saying that the negative impact of the COVID-19 pandemic has stabilized and consumer activity would get a boost in the second half of the year.
“Board members concluded that it is better to stay put at this time, as relief and stimulus measures have achieved their intended effect of preventing a credit crunch and an economic downturn,” central bank Governor Yang Chin-long (楊金龍) said after its quarterly board meeting, citing an increase in lending and stable interest margins for the past three months.
In March, the bank cut the rediscount rate by 25 basis points to ease the financial burden on corporate borrowers and households as the virus outbreak kept people home and wreaked havoc on retailers, airlines, hotels, restaurants and travel agencies.
Consumer activity might pick up next month with the release of the Triple Stimulus Vouchers on July 15 and other aid programs, Yang said.
The bank lowered its forecast for the nation’s GDP growth this year from 1.92 percent to 1.52 percent, saying it is admirable to stay positive while most other countries face deep recessions induced by lockdowns of nonessential businesses to curb the virus’ spread.
The central bank would not let its guard down, but would closely monitor how the pandemic pans out and respond as needed, Yang said, adding that confirmed cases soared to nearly 8.5 million as yesterday, while there was a new outbreak in Beijing.
Capital formation and government spending would shore up the nation’s GDP growth by 1.45 percent, while exports could slip into negative territory, he said.
Consumer prices might post zero growth, but they are not in danger of deflating, he said.
The governor said that there had been interventions in foreign exchange markets to slow the appreciation of the New Taiwan dollar.
“The rapid and massive capital influx this month, reversing five months of outflows, warranted interventions to stabilize the local currency market,” Yang said, attributing the inflows to a relatively resilient TAIEX and local firms burnishing their semi-annual accounts.
Capital movements drove the NT dollar up 1.9 percent after months of depreciation, Yang said.
However, there was no evident capital flight from Hong Kong to Taiwan or fund flows from speculation on local properties.
US President Donald Trump had threatened to terminate Hong Kong’s favorable trade status if Beijing pushes security legislation on the territory.
Yang said Trump has not yet made good on the threat and it would be difficult for other destinations to replace Hong Kong as a regional financial hub.
The domestic unit of the Chinese-owned, Dutch-headquartered chipmaker Nexperia BV will soon be able to produce semiconductors locally within China, according to two company sources. Nexperia is at the center of a global tug-of-war over critical semiconductor technology, with a Dutch court in February ordering a probe into alleged mismanagement at the company. The geopolitical tussle has disrupted supply chains, with some carmakers reportedly forced to cut production due to chip shortages. Local production would allow Nexperia’s domestic arm, Nexperia Semiconductors (China) Ltd (安世半導體中國), to bypass restrictions in place since October on the supply of silicon wafers — etched with tiny components to
Singapore-based ride-hailing and delivery giant Grab Holdings Ltd has applied for regulatory approval to acquire the Taiwan operations of Germany-based Delivery Hero SE's Foodpanda in a deal valued at about US$600 million. Grab submitted the filing to the Fair Trade Commission on Friday last week, with the transaction subject to regulatory review and approval, the company said in a statement yesterday. Its independent governance structure would help foster a healthy and competitive market in Taiwan if the deal is approved, Grab said. Grab, which is listed on the NASDAQ, said in the filing that US-based Uber Technologies Inc holds about 13 percent of
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday received government approval to deploy its advanced 3-nanometer (3nm) process at its second fab currently under construction in Japan, the Ministry of Economic Affairs said in a news release. The ministry green-lit the plan for the facility in Kumamoto, which is scheduled to start installing equipment and come online in 2028 with a monthly production capacity of 15,000 12-inch wafers, the ministry said. The Department of Investment Review in June 2024 authorized a US$5.26 billion investment for the facility, slated to manufacture 6- to 12nm chips, significantly less advanced than 3nm process. At a meeting with
Taiwan’s food delivery market could undergo a major shift if Singapore-based Grab Holdings Ltd completes its planned acquisition of Delivery Hero SE’s Foodpanda business in Taiwan, industry experts said. Grab on Monday last week announced it would acquire Foodpanda’s Taiwan operations for US$600 million. The deal is expected to be finalized in the second half of this year, with Grab aiming to complete user migration to its platform by the first half of next year. A duopoly between Uber Eats and Foodpanda dominates Taiwan’s delivery market, a structure that has remained intact since the Fair Trade Commission (FTC) blocked Uber Technologies Inc’s
RSS