Stable consumer prices, which are forecast to grow about 1.6 percent this year, indicate that Taiwan’s economy is not overheating and lend support to keeping interest rates unchanged, central bank Governor Yang Chin-long (楊金龍) said yesterday.
Yang made the remarks during a visit by lawmakers from the legislature’s Finance Committee to the central bank to inquire about monetary policy trends, and the economic outlook at home and abroad.
US Federal Reserve board members remain divided about the threat of inflationary pressures and might discuss whether to taper bond purchases during the Jackson Hole, Wyoming, economic policy symposium today, Yang added.
Photo: George Tsorng, Taipei Times
Fed members have said that US inflation of 5 percent is a temporary phenomenon to defend the bank’s money-printing policy and might hold on to current rates until early 2023, he added.
The US can invoke quantitative easing to bolster its economy, because the greenback is a major currency in which countries carry out and settle cross-border trade, Yang said.
The US dollar gains in value during bad times when investors take shelter in the currency — a tactic that other countries cannot imitate, he said.
Yang said he saw no urgency in raising interest rates in Taiwan, where inflationary pressures are mild and benign.
“Inflation sits atop the list of concerns when the central bank draws its monetary policy,” he said.
Consumer prices are expected to increase 1.6 to 1.7 percent this year, suggesting that the economy is not overheating and there is no need for sweeping tightening measures, he said.
The central bank is due to review its monetary policy next month.
Taiwan’s policy rate, currently at a record low of 1.125 percent, is not particularly loose when compared with negative interest rates in Japan and Switzerland, Yang said.
Latin American countries, such as Peru, Chile, Brazil and Mexico, have to raise interest rates to cope with imported inflation, which is not a serious issue in Taiwan, he said.
Taiwan’s economic growth, while vibrant, is largely supported by exports, which have benefited from US-China trade tensions and a severe chip shortage, Yang said.
However, domestic demand-reliant sectors have taken a hard hit from a local COVID-19 outbreak that started in May, he added.
Uneven economic growth lends support to accommodative monetary policy and the government’s plan to issue consumption vouchers to help energize domestic demand, he said.
US crude futures on Friday topped US$80 a barrel for the first time since November 2014 as a global energy crisis boosts demand at a time when OPEC+ producers are keeping supplies tight. West Texas Intermediate (WTI) for November delivery popped above the key psychological level before pulling back and closing up 1.34 percent at US$79.35 a barrel, gaining 4.57 percent from a week earlier. Brent crude for December delivery increased 0.54 percent a barrel to US$82.39, up 3.92 percent from a week earlier. This week brought many indications that supplies would remain constrained: Saudi Aramco said a global natural gas shortage was
Units of Intel Corp and Samsung Electronics Co are targeting to resume full operations of their Ho Chi Minh City plants by the end of next month, a move that could provide relief to global supply chains. Saigon Hi-Tech Park is helping its tenants, many of which are running at about 70 percent capacity, to operate fully next month, park deputy manager Le Bich Loan said in a phone interview. She did not elaborate on the steps the park is taking, particularly efforts at bringing back workers who fled to home provinces. The Ho Chi Minh City unit of Nidec Sankyo Corp,
CHIP CRUNCH: Apple’s woes show that even the king of the technology world is not immune from global shortages made worse by the COVID-19 pandemic Apple Inc is likely to slash its projected iPhone 13 production targets for this year by as many as 10 million units as prolonged chip shortages hit its flagship product, people with knowledge of the matter said. The company had expected to produce 90 million new iPhone models in the final three months of this year, but it is now telling manufacturing partners that the total would be lower because Broadcom Inc and Texas Instruments Inc are struggling to deliver enough components, the people said. Apple gets display parts from Texas Instruments, while Broadcom is its longtime supplier of wireless components. One Texas
Down a dusty farm track in Chilean wine country, behind a wooden gate wrapped in chains, forestry experts are nursing a plantation of saplings whose bark holds the promise of potent vaccines. Quillay trees, technically known as Quillaja saponaria, are rare evergreens native to Chile that have long been used by the indigenous Mapuche people to make soap and medicine. In the past few years, they have also been used to make a highly successful vaccine against shingles and the world’s first malaria vaccine, as well as foaming agents for products in the food, beverage and mining industries. Now two saponin molecules,