Central bank Governor Yang Chin-long (楊金龍) yesterday reiterated that the bank would intervene in the foreign exchange market to maintain currency stability if necessary, but denied there is a so-called “Yang’s defense line.”
Yang made the statement at a meeting of the legislature’s Finance Committee where lawmakers from across party lines voiced concern over the New Taiwan dollar’s gradual, but steady decline against the US dollar.
“The central bank will step in when it spots abnormal fund movements that might threaten the currency market’s stability,” Yang told lawmakers.
Photo: CNA
The governor attributed the NT dollar’s performance to global fund outflows from Asian markets to take shelter in the greenback, after the US Federal Reserve last month said that it would keep interest rates up and for longer.
The NT dollar has fallen 5.01 percent against the greenback so far this year, a relatively stable showing compared with the yen’s 11.8 percent slump, the won’s 6.99 percent drop and the yuan’s 5.04 percent decline, Yang said.
Asian currencies saw greater corrections — from 7.67 to 25.66 percent — from 2017 to 2018 at the beginning of the US-China trade dispute when he had just assumed the governorship, Yang said.
The market has the final say regarding the local currency’s value, the governor said, adding that there is no so-called “Yang’s defense line,” although the market suspects that NT$32.4 is the level the central bank wants to maintain against the US dollar.
The NT dollar yesterday rose NT$0.003 from a day earlier to close at NT$32.325 against the greenback in Taipei trading, although it weakened to a seven-year low of NT$32.435 intersession, data from the central bank’s Web site showed.
Yang dismissed concerns that the US would put Taiwan on its watch list for unfair foreign exchange practices for supporting the local currency.
“The US Department of the Treasury frowns on interventions to thwart currency appreciation, but does not mind efforts to support the currency,” Yang said, adding that the US understands the importance of currency stability, and the central bank maintains good communication with the US.
Although Taiwan’s exports are taking a hit from a global slowdown, the nation has accumulated a trade surplus of more than US$20 billion, one of three criteria used by the US to weigh currency manipulation, Yang said.
Disappointing exports would weigh on Taiwan’s GDP and stock market, and foreign funds would move to realize capital gains whenever they see fit, Yang said.
Capital outflows have amounted to US$15.71 billion thus far, accounting for the rout on the TAIEX, he said.
The governor said fighting inflation remains the central bank’s top priority, but he is not overly worried about the second wave of inflation that is approaching.
It is unlikely that US consumer prices would reach new highs, even if international oil prices rise to US$100 a barrel, Yang said.
Rather, it would only slow the pace at which consumer prices return to the 2 percent target, he added.
Shares of contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) came under pressure yesterday after a report that Apple Inc is looking to shift some orders from the Taiwanese company to Intel Corp. TSMC shares fell NT$55, or 2.4 percent, to close at NT$2,235 on the local main board, Taiwan Stock Exchange data showed. Despite the losses, TSMC is expected to continue to benefit from sound fundamentals, as it maintains a lead over its peers in high-end process development, analysts said. “The selling was a knee-jerk reaction to an Intel-Apple report over the weekend,” Mega International Investment Services Corp (兆豐國際投顧) analyst Alex Huang
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is expected to remain Apple Inc’s primary chip manufacturing partner despite reports that Apple could shift some orders to Intel Corp, industry experts said yesterday. The comments came after The Wall Street Journal reported on Friday that Apple and Intel had reached a preliminary agreement following more than a year of negotiations for Intel to manufacture some chips for Apple devices. Taiwan Institute of Economic Research (台灣經濟研究院) economist Arisa Liu (劉佩真) said TSMC’s advanced packaging technologies, including integrated fan-out and chip-on-wafer-on-substrate, remain critical to the performance of Apple’s A-series and M-series chips. She said Intel and Samsung
POWER BUILDUP: Powered by Nvidia’s B200 Blackwell chips, the data center would support MediaTek’s computing power demand and business growth, the company said Smartphone chip designer MediaTek Inc (聯發科) yesterday launched a new artificial intelligence (AI) data center with a maximum capacity of 45 megawatts to meet its rising demand for computing power required to develop new advanced chips for AI applications. The company has completed the first-phase computing power buildup at the data center in Miaoli County’s Tongluo Township (銅鑼), providing 15 megawatts of capacity to support its research and development (R&D) capabilities, despite an industrywide shortage of key components, MediaTek said. Supply constraints have plagued a wide range of key components, including memory chips, solid-state drives, power supply units and central
TRANSITION: With the closure, the company would reorganize its Taiwanese unit to a sales and service-focused model, Bridgestone said Bridgestone Corp yesterday announced it would cease manufacturing operations at its tire plant in Hsinchu County’s Hukou Township (湖口), affecting more than 500 workers. Bridgestone Taiwan Co (台灣普利司通) said in a statement that the decision was based on the Tokyo-based tire maker’s adjustments to its global operational strategy and long-term market development considerations. The Taiwanese unit would be reorganized as part of the closure, effective yesterday, and all related production activities would be concluded, the statement said. Under the plan, Bridgestone would continue to deepen its presence in the Taiwanese market, while transitioning to a sales and service-focused business model, it added. The Hsinchu
RSS