Credit control measures have achieved the goal of maintaining the nation’s financial stability, but are unlikely to make houses more affordable, central bank Governor Yang Chin-long (楊金龍) said yesterday.
Yang made the comments while fielding questions on the central bank’s operations at a meeting of the legislature’s Finance Committee.
“The series of credit controls were intended to prevent money from overflowing into the real-estate market and straining the financial system in times of credit tightening,” the governor said, adding that the US Federal Reserve has indicated plans to taper its bond-buying program later this year and to hike interest rates following better employment figures.
Photo: Liao Chen-huei, Taipei Times
Barring lenders from granting grace periods on second-home purchases in the six special municipalities, as well as Hsinchu City and Hsinchu County, was intended to prevent overleveraging on the part of individual buyers, Yang said.
Wealth management analysts have encouraged people to acquire real estate and take advantage of record-low interest rates, which average 1.31 percent for house loans.
“Micro adjustments” are necessary after two previous waves of credit controls failed to cool real-estate lending, Yang said.
The governor said that he partially agreed with the opinion of Highwealth Construction Corp (興富發) founder Cheng Chin-tien (鄭欽天) that credit controls reflect a boom in the property market.
However, developers would like to portray the market in a way that helps boost property sales and prices, Yang said.
Asked whether tightening measures would help make houses affordable again for ordinary people, the governor said that the goal has proved “unachievable” over the years and the central bank has instead sought to “induce a soft landing.”
Toward that end, the central bank is closely monitoring the market and would introduce adjustments if necessary, he added.
A central bank report shows that in the first half of the year, the bank intervened in the foreign-exchange market by buying US$8.73 billion of US dollars to slow the appreciation of the New Taiwan dollar.
Exporters have said that profit erosion caused by a strong NT dollar, which has outperformed other Asian currencies this year.
The NT dollar has hovered between NT$27.5 and NT$28 against the US dollar in the past three months, the central bank said, adding that the NT dollar’s direction hinges on global demand for the US dollar and Taiwanese exports.
Strong exports would lend support to the local currency, while bond-buying tapering and interest rate hikes by the US Fed would bolster the US dollar, Yang said.
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