Raising interest rates before other economies would cause a surge in incoming funds and create chaos in the nation’s foreign-exchange market, central bank Governor Yang Chin-long (楊金龍) said yesterday.
Overseas funds could also invest in Taiwan’s overheated real-estate market and raise home prices further, Yang said at a meeting of the legislature’s Finance Committee when asked by Chinese Nationalist Party (KMT) Legislator William Tseng (曾銘宗) about a possible rate hike and its likely effects.
Yang said the central bank is closely monitoring how other central banks adjust their monetary policies, because acting alone could pose problems.
Photo: Liao Cheng-hui, Taipei Times
“Taiwan’s stock market remains sound, so if the central bank raises key interest rates by 25 basis points, it would not put much pressure on stocks,” Yang said.
The TAIEX closed down 14.77 points, or 0.08 percent, at 17,803.54 yesterday, after moving in a narrow range throughout the session. The benchmark index has risen 20.95 since the beginning of this year, Taiwan Stock Exchange data showed.
“But a rate hike in Taiwan before other countries act could send the New Taiwan dollar higher against the greenback due to large fund inflows,” he said.
Yang also raised concerns that the heavy influx of funds after a rate increase would boost liquidity in the domestic real-estate market, as soaring home prices have sparked outcries from younger Taiwanese who say they cannot afford to buy a home.
To rein in residential property prices, Yang said the central bank could consider introducing more select credit control measures in the next policymaking meeting.
Three separate rounds of credit control measures targeting institutional and retail home buyers have taken effect since the end of last year, mostly to lower the home loan-to-value ratio to prevent speculation, with mixed results.
Yang said the average home loan-to-value ratio for corporate buyers was lowered to 39 percent, from 64 percent before the measures were put in place, and the same ratio targeting buyers with at least three homes was also lowered.
The central bank has also increased inspections of loans extended by banks operating in Taiwan, including foreign banks, to the property market, urging banks to abide by the regulations to extend mortgages.
The central bank has carried out 51 rounds of inspections of the local banking industry so far this year, Yang said.
The central bank is to hold its next quarterly policymaking meeting on Dec. 16.
KEEPING UP: The acquisition of a cleanroom in Taiwan would enable Micron to increase production in a market where demand continues to outpace supply, a Micron official said Micron Technology Inc has signed a letter of intent to buy a fabrication site in Taiwan from Powerchip Semiconductor Manufacturing Corp (力積電) for US$1.8 billion to expand its production of memory chips. Micron would take control of the P5 site in Miaoli County’s Tongluo Township (銅鑼) and plans to ramp up DRAM production in phases after the transaction closes in the second quarter, the company said in a statement on Saturday. The acquisition includes an existing 12 inch fab cleanroom of 27,871m2 and would further position Micron to address growing global demand for memory solutions, the company said. Micron expects the transaction to
Nvidia Corp’s GB300 platform is expected to account for 70 to 80 percent of global artificial intelligence (AI) server rack shipments this year, while adoption of its next-generation Vera Rubin 200 platform is to gradually gain momentum after the third quarter of the year, TrendForce Corp (集邦科技) said. Servers based on Nvidia’s GB300 chips entered mass production last quarter and they are expected to become the mainstay models for Taiwanese server manufacturers this year, Trendforce analyst Frank Kung (龔明德) said in an interview. This year is expected to be a breakout year for AI servers based on a variety of chips, as
Global semiconductor stocks advanced yesterday, as comments by Nvidia Corp chief executive officer Jensen Huang (黃仁勳) at Davos, Switzerland, helped reinforce investor enthusiasm for artificial intelligence (AI). Samsung Electronics Co gained as much as 5 percent to an all-time high, helping drive South Korea’s benchmark KOSPI above 5,000 for the first time. That came after the Philadelphia Semiconductor Index rose more than 3 percent to a fresh record on Wednesday, with a boost from Nvidia. The gains came amid broad risk-on trade after US President Donald Trump withdrew his threat of tariffs on some European nations over backing for Greenland. Huang further
HSBC Bank Taiwan Ltd (匯豐台灣商銀) and the Taiwan High Prosecutors Office recently signed a memorandum of understanding (MOU) to enhance cooperation on the suspicious transaction analysis mechanism. This landmark agreement makes HSBC the first foreign bank in Taiwan to establish such a partnership with the High Prosecutors Office, underscoring its commitment to active anti-fraud initiatives, financial inclusion, and the “Treating Customers Fairly” principle. Through this deep public-private collaboration, both parties aim to co-create a secure financial ecosystem via early warning detection and precise fraud prevention technologies. At the signing ceremony, HSBC Taiwan CEO and head of banking Adam Chen (陳志堅)
RSS