The New Taiwan dollar dropped more than 8 percent against the US dollar in the Year of the Tiger, the steepest annual decline in 25 years, with the greenback bolstered by aggressive interest rate hikes made by the US Federal Reserve.
The NT dollar closed at NT$30.368 against the US dollar on Thursday, the last trading session before the Lunar New Year holiday, down NT$2.54, or 8.36 percent, for the lunar calendar year.
Beginning in 2019, the NT dollar appreciated in value for three consecutive years as it benefited from the US-China trade war, quantitative easing policies during the COVID-19 pandemic and robust domestic stock market growth.
Photo: CNA
It closed out the previous lunar year, the Year of the Ox, at NT$27.828 against the US dollar.
However, the Year of the Tiger brought a sharply different set of circumstances, with Russia’s invasion of Ukraine, rising inflation and the US Fed raising interest rates by a cumulative 425 base points.
As the US dollar soared, the NT dollar — facing pressure from declining exports — sank from NT$27 to a low of NT$32 against the greenback in a “rarely seen” margin of decline, a foreign exchange industry source told CNA.
Only when the Fed began signaling late last year that it would slow the rapid pace of interest rate increases, causing the US dollar to drop, was the NT dollar able to rebound slightly, the person said.
Looking ahead to the Year of the Rabbit, the US is likely to end its rate hikes, and possibly even lower rates at the end of this year, which would improve the NT dollar’s prospects of regaining some of the value it lost in the Year of the Tiger, the source said.
While falling US inflation has fanned speculation that the Fed would further slow its pace of interest rate hikes, several top US central bank officials have said more still needs to be done before they are satisfied prices are under control.
US Fed Vice Chair Lael Brainard on Thursday said policymakers would “stay the course” in lifting rates.
“Even with the recent moderation, inflation remains high and policy will need to be sufficiently restrictive for some time,” Brainard told an event in Chicago, adding that it would ensure inflation returns to 2 percent on a sustained basis.
At a separate event on Thursday, New York Fed President John Williams said inflation remained too high, and that bringing down prices would likely require a “period of below-trend growth and some softening of labor market conditions.”
While the Fed has taken strong action, “it is clear that monetary policy still has more work to do,” he said, adding that policy affects parts of the economy differently.
This time was supposed to be different. The memorychip sector, famous for its boom-and-bust cycles, had changed its ways. A combination of more disciplined management and new markets for its products — including 5G technology and cloud services — would ensure that companies delivered more predictable earnings. Yet, less than a year after memory companies made such pronouncements, the US$160 billion industry is suffering one of its worst routs ever. There is a glut of the chips sitting in warehouses, customers are cutting orders and product prices have plunged. “The chip industry thought that suppliers were going to have better control,” said
Enimmune Corp (安特羅生技) has obtained marketing approval from the Food and Drug Administration (FDA) for its EnVAX-A71 vaccine for enterovirus 71 (EV-71), becoming the nation’s first enterovirus vaccine completely made in Taiwan, it said yesterday. After spending 13 years and NT$1.5 billion (US$49.77 million) on the research and development of the vaccine, Enimmune plans to start manufacturing and marketing it by the end of March, the company said in a statement, without disclosing customer order figures. “It is possible that the vaccine would not be included in a national vaccination program initially, and consumers would need to pay for it themselves,” parent
Vaccine skeptics blocking transfusions for life-saving surgeries, Facebook groups inciting violence against doctors and a global search for unvaccinated donors — COVID-19 misinformation has bred a so-called “pure blood” movement. The movement spins anti-vaccine narratives focused on unfounded claims that receiving blood from people inoculated against COVID-19 “contaminates” the body. Some have advocated for blood banks that draw from “pure” unvaccinated people, while medics in North America say they have fielded requests from people demanding transfusions from donors who have not received a vaccine. In closed social media groups, vaccine skeptics — who brand themselves as “pure bloods” — promote violence against doctors
Asteroid mining start-up AstroForge Inc is planning to launch its first two missions to space this year as it seeks to extract and refine metals from deep space. The first launch, scheduled for April, is to test AstroForge’s technique for refining platinum from a sample of asteroid-like material. The second, planned for October, would scout for an asteroid near Earth to mine. The missions are part of AstroForge’s goal of refining platinum-group metals from asteroids, with the aim of bringing down the cost of mining these metals. It also hopes to reduce the massive amount of carbon emissions that stem from mining
RSS