The central bank yesterday kept its policy interest rate at a record low of 1.125 percent for the second consecutive quarter and slightly raised its forecast for GDP growth this year from 1.52 percent to 1.6 percent.
“The board extended the loose monetary policy to help stabilize consumer prices and support the economy,” central bank Governor Yang Chin-long (楊金龍) said after its quarterly board meeting.
Although Taiwan’s economy has resumed growth and might improve further, a negative output gap might remain, meaning growth of supply would outpace demand.
Photo: CNA
Local tech firms have benefited from a boom in technology products sustaining a low-contact economy, while domestic tourism has staged a V-shaped recovery after the COVID-19 pandemic was brought under control in May, the bank said, after raising its growth projection by 0.08 percentage points based on government spending and private investment as supply chains relocate from China.
Low-interest rates help bolster consumer prices, which might contract 0.2 percent this year, Yang said.
Deflation is not a concern, as the core consumer price index, a more reliable tracker because it excludes volatile items, would increase 0.24 percent, he said.
Taiwan does not need to follow the US Federal Reserve, which overnight indicated that it would keep policy rates near zero for at least another three years, Yang said.
However, Taiwan would not take a different path if other central banks maintain an accommodative stance, he said.
The bank reiterated the need to regulate the currency market when it spots massive capital movements.
It said that the New Taiwan dollar is stable and its ongoing appreciation moderate.
As of yesterday, the NT dollar had picked up 2.64 percent against the US greenback this year, less than the Chinese yuan and other counterparts, Yang said.
The governor disputed media reports that said the central bank restricted sales of US dollars in large amounts by currency traders to ease appreciation pressure on the NT dollar.
“It is inaccurate to characterize a goodwill suggestion as intervention,” Yang said.
The central bank is investigating suspect currency trading by eight grain merchants and four banks, he said.
The probe is not yet conclusive, but the transactions appear out of sync with the firms’ business needs, Yang said, adding that it is a tough task to track foreign capital flows.
The local bourse reported capital inflows in July and outflows last month, while the NT dollar has consistently gained value.
A strong NT dollar is unfavorable for local exporters and life insurers, which face foreign exchange and portfolio losses.
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
RECORD-BREAKING: TSMC’s net profit last quarter beat market expectations by expanding 8.9% and it was the best first-quarter profit in the chipmaker’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which counts Nvidia Corp as a key customer, yesterday said that artificial intelligence (AI) server chip revenue is set to more than double this year from last year amid rising demand. The chipmaker expects the growth momentum to continue in the next five years with an annual compound growth rate of 50 percent, TSMC chief executive officer C.C. Wei (魏哲家) told investors yesterday. By 2028, AI chips’ contribution to revenue would climb to about 20 percent from a percentage in the low teens, Wei said. “Almost all the AI innovators are working with TSMC to address the
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”