PHILIPPINES
Central bank hikes rates
The central bank yesterday delivered its second 75-basis-point interest-rate increase this year, as it sought to support the peso and cool inflation by matching the pace of hikes by the US Federal Reserve. Bangko Sentral ng Pilipinas (BSP) raised the overnight reverse repurchase rate to 5 percent. Under BSP Governor Felipe Medalla, the central bank has been at the forefront of monetary tightening in Southeast Asia, having raised rates by a total of 300 basis points since May to cool inflation and shore up its currency. The peso is Southeast Asia’s worst performer this year, sliding more than 11 percent against the US dollar.
INDONESIA
Central bank raises rates
The central bank yesterday implemented another large interest-rate increase to ease pressure on the rupiah, which has become Asia’s worst-performing currency this quarter. Bank Indonesia raised its seven-day reverse repurchase rate to 5.25 percent. The nation, one of the last in the region to embark on monetary tightening, has swiftly caught up with its peers by raising interest rates by a cumulative 175 basis points since August. The central bank sees GDP growth this year coming in at the upper end of its 4.5 to 5.3 percent range, Bank Indonesia Governor Perry Warjiyo said at a briefing to announce the rate move.
RUSSIA
Economy falls into recession
The economy has entered a recession, as GDP fell 4 percent in the third quarter, first estimates published on Wednesday by national statistics agency Rosstat showed. The drop in GDP follows a similar 4 percent contraction in the second quarter, as Western sanctions pummel the economy following Moscow’s offensive in Ukraine. The contraction was driven by a 22.6 percent plunge in wholesale trade and a 9.1 percent drop in retail trade. On the bright side, construction grew 6.7 percent and agriculture rose 6.2 percent. The central bank on Tuesday last week predicted that GDP would contract 3.5 percent this year.
CONGLOMERATES
Siemens sees rising margins
Siemens AG expects higher margins in its three key divisions next year, defying pressure from a global economic slowdown on the back of a record-high order book. The group reported net income more than doubling to 2.7 billion euros (US$2.8 billion) for the fiscal fourth quarter that ended in September, Siemens said yesterday. The return on sales at its main Digital Industries division is forecast to rise to as much as 22 percent next fiscal year, up from 20 percent in the annual period that just ended. All its industrial businesses saw order intake and revenue rise last year, even as sanctions on Russia, high inflation and supply-chain problems weighed, Siemens said.
CONGLOMERATES
Thyssenkrupp plans dividend
Thyssenkrupp AG plans to pay a dividend for the first time in four years even as it warned that earnings would fall substantially next year due to a weakening economy. Adjusted earnings before interest and taxes are expected to fall to a mid-to-high three-digit million euro range, below the 2.1 billion euros reported for the fiscal year that ended on Sept. 30, the company said yesterday. Thyssenkrupp still plans to propose its first dividend since 2018 after its cash drain narrowed during the fourth quarter.
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
‘SHORT TERM’: The local currency would likely remain strong in the near term, driven by anticipated US trade pressure, capital inflows and expectations of a US Fed rate cut The US dollar is expected to fall below NT$30 in the near term, as traders anticipate increased pressure from Washington for Taiwan to allow the New Taiwan dollar to appreciate, Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said. Following a sharp drop in the greenback against the NT dollar on Friday, Lin told the Central News Agency that the local currency is likely to remain strong in the short term, driven in part by market psychology surrounding anticipated US policy pressure. On Friday, the US dollar fell NT$0.953, or 3.07 percent, closing at NT$31.064 — its lowest level since Jan.
The New Taiwan dollar and Taiwanese stocks surged on signs that trade tensions between the world’s top two economies might start easing and as US tech earnings boosted the outlook of the nation’s semiconductor exports. The NT dollar strengthened as much as 3.8 percent versus the US dollar to 30.815, the biggest intraday gain since January 2011, closing at NT$31.064. The benchmark TAIEX jumped 2.73 percent to outperform the region’s equity gauges. Outlook for global trade improved after China said it is assessing possible trade talks with the US, providing a boost for the nation’s currency and shares. As the NT dollar
The Financial Supervisory Commission (FSC) yesterday met with some of the nation’s largest insurance companies as a skyrocketing New Taiwan dollar piles pressure on their hundreds of billions of dollars in US bond investments. The commission has asked some life insurance firms, among the biggest Asian holders of US debt, to discuss how the rapidly strengthening NT dollar has impacted their operations, people familiar with the matter said. The meeting took place as the NT dollar jumped as much as 5 percent yesterday, its biggest intraday gain in more than three decades. The local currency surged as exporters rushed to
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