Central bank Governor Yang Chin-long (楊金龍) yesterday indicated that inflation is becoming less of a concern for Taiwan’s economy, comments that come a week before a key decision on interest rates by the monetary policymaker and also ahead of the Directorate-General of Budget, Accounting and Statistics (DGBAS) releasing inflation data for last month.
The consumer price index (CPI) last month rose 2.24 percent from a year earlier, accelerating from a revised 1.94 percent increase in April, the DGBAS reported yesterday.
“CPI, core CPI, important staples prices and prices of commonly purchased items are gradually falling,” Yang told lawmakers during a regular question-and-answer session at a meeting of the Finance Committee at the legislature in Taipei. “The economy is recovering, but it’s not very strong.”
Photo: Liao Chen-hui, Taipei Times
The central bank would take into account global monetary policy conditions when it sets interest rates, Yang said.
Those remarks came as Canada took the lead in G7 nations cutting rates.
Taiwan’s interest-rate swaps (IRS) — a measure of trader expectations for rate hikes — fell after Yang’s remarks.
The three-year IRS dropped as much as 5.5 basis points, the most since late March.
In March, the central bank unexpectedly raised its benchmark interest rate to the highest since 2008.
Yang said at the time that “inflation has been high since 2021” and singled out concern over electricity costs.
Asked by lawmakers if the central bank would make yet another surprise next week, Yang yesterday said: “It’s not good to give surprises from time to time,” remarks that seemed to imply that the central bank might stay put this time.
Lawmakers also asked Yang if the central bank would raise rates or further tighten credit control measures for real-estate financing to battle rising housing prices.
Yang said that interest rates would not be used to influence property prices and that central bank board members would look into the property issue at a quarterly policymaking meeting on Thursday next week.
Climbing home prices are a lingering concern.
Earlier this week, the Chinese-language Commercial Times reported that some commercial lenders think the central bank might tighten mortgage lending rules at next week’s meeting.
The central bank has introduced several rounds of selective credit controls on local banks since December 2020 to cool the property market and rein in rising housing prices.
While Taiwan expects the economy to grow this year at the fastest pace since 2021, inflation has been a key concern for policymakers and the public.
Although the pace of price gains has been low compared with elsewhere in the world, even slower wage gains has meant the erosion of household earnings.
Last week, the DGBAS upgraded its GDP and CPI growth estimates for this year to 3.94 percent and 2.07 percent respectively, up from 3.43 percent and 1.85 percent it projected earlier.
The bank is expected to adjust upward its economic growth and inflation forecast next week as well.
The domestic unit of the Chinese-owned, Dutch-headquartered chipmaker Nexperia BV will soon be able to produce semiconductors locally within China, according to two company sources. Nexperia is at the center of a global tug-of-war over critical semiconductor technology, with a Dutch court in February ordering a probe into alleged mismanagement at the company. The geopolitical tussle has disrupted supply chains, with some carmakers reportedly forced to cut production due to chip shortages. Local production would allow Nexperia’s domestic arm, Nexperia Semiconductors (China) Ltd (安世半導體中國), to bypass restrictions in place since October on the supply of silicon wafers — etched with tiny components to
Taiwan’s foreign exchange reserves fell below the US$600 billion mark at the end of last month, with the central bank reporting a total of US$596.89 billion — a decline of US$8.6 billion from February — ending a three-month streak of increases. The central bank attributed the drop to a combination of factors such as outflows by foreign institutional investors, currency fluctuations and its own market interventions. “The large-scale outflows disrupted the balance of supply and demand in the foreign exchange market, prompting the central bank to intervene repeatedly by selling US dollars to stabilize the local currency,” Department of Foreign
Taiwan is open to joining a global liquefied natural gas (LNG) program if one is created, but on the condition that countries provide delivery even in a scenario where there is a conflict with China, an energy department official said yesterday. While Taiwan’s priority is to have enough LNG at home, the nation is open to exploring potential strategic reserves in other countries such as Japan or South Korea, Energy Administration Deputy Director-General Chen Chung-hsien (陳崇憲) said. While the LNG market does not have a global reserve for emergencies like that of oil, the concept has been raised a few times —
AI-FUELED DEMAND: The company has been benefiting from the skyrocketing prices for DRAM chips amid the AI frenzy, especially its core product — DDR4 DRAM chips DRAM chipmaker Nanya Technology Corp (南亞科技) yesterday reported that its revenue for the first quarter surged 582.91 percent to NT$49.09 billion (US$1.54 billion) from NT$7.19 billion a year earlier, as the supply crunch caused chip price spikes. Last quarter’s figure is the highest on record. On a quarterly basis, revenue jumped 63.14 percent from NT$30.09 billion, the company said. In January, Nanya Technology expected global DRAM supply scarcity to continue through the first half of 2028, thanks to strong demand for artificial intelligence (AI) applications. Market researcher TrendForce Corp (集邦科技) forecast prices of standard DRAM chips would rise between 58 percent and 63
RSS