The Council for Economic Planning and Development said yesterday that the US government’s move to gradually scale back its quantitative easing policy would have a limited impact on Taiwan’s economy.
However, the change in US monetary policy could affect some Southeast Asian countries, which in turn might have an indirect effect on Taiwan, Council for Economic Planning and Development Minister Kuan Chung-ming (管中閔) said.
In light of the close relations between Taiwan and Southeast Asian nations, Taiwan should pay extra attention to the possible effects of currency fluctuations, he said at a press conference following a weekly Cabinet meeting.
In Taipei trading yesterday, the value of the New Taiwan dollar fell the most in seven months, while the benchmark TAIEX rose slightly, up 0.7 percent, or 58.36 points, to close at 8,407.40 points.
“The announcement made by the US Federal Reserve can minimize uncertainty in the market, allowing stock and foreign exchange markets to react accordingly,” Council for Economic Planning and Development Chief Secretary Kao Shien-quey (高仙桂) told a separate press conference.
In what is seen as the beginning of an exit from quantitative easing, the Fed announced on Wednesday that it would cut back its monthly bond-buying program by US$10 billion to US$75 billion, starting next month.
The US central bank said it would maintain its low interest rates until the unemployment rate declines to below 6.5 percent.
Kao said the Fed’s announcement conveyed a message that a recovery in the US economy is evident, which would benefit Taiwan’s economy.
Minister of Finance Chang Sheng-ford (張盛和) said yesterday a recovering US economy could serve as a driver for Taiwanese exports.
In the first 11 months of this year, the US accounted for 10.7 percent of the nation’s total exports, making it the second-largest destination after China, which has 39.5 percent.
Financial Supervisory Commission Chairman William Tseng (曾銘宗) said that despite the gradual reduction in bond buying by the Fed, interest rates in the US are unlikely to go up sharply any time soon, so Taiwanese interest rates are also expected to remain stable in the short term.
Speaking at a meeting of the legislature’s Finance Committee in Taipei, Tseng said there is little room for local interest rates to move higher in the short term as Taiwan remains awash with liquidity.
However, the news from the Fed led to currency fluctuations in Asian countries, including Taiwan.
The NT dollar fell NT$0.2 to NT$29.945 against the greenback yesterday, marking the biggest slide since May 10 and the weakest level since Sept. 6, Taipei Forex Inc’s data showed.
However, the central bank said in a statement that the local currency’s exchange rate remains relatively steady.
Data provided with the central bank’s statement showed that the NT dollar fell 0.67 percent against the greenback from a day earlier. The decline compared with the Japanese yen’s 0.93 percent fall, the South Korean won’s 0.83 percent decline, the Australian dollar’s 0.62 percent fall and a 0.01 percent decline for the Chinese yuan.
Tropical Storm Gaemi strengthened into a typhoon at 2pm yesterday, and could make landfall in Yilan County tomorrow, the Central Weather Administration (CWA) said yesterday. The agency was scheduled to issue a sea warning at 11:30pm yesterday, and could issue a land warning later today. Gaemi was moving north-northwest at 4kph, carrying maximum sustained winds near its center of up to 118.8kph and gusts of 154.8kph. The circumference is forecast to reach eastern Taiwan tomorrow morning, with the center making landfall in Yilan County later that night before departing from the north coast, CWA weather forecaster Kuan Shin-ping (官欣平) said yesterday. Uncertainty remains and
SEA WARNING LIKELY: The storm, named Gaemi, could become a moderate typhoon on Wednesday or Thursday, with the Taipei City Government preparing for flooding A tropical depression east of the Philippines developed into a tropical storm named Gaemi at 2pm yesterday, and was moving toward eastern Taiwan, the Central Weather Administration (CWA) said. Gaemi could begin to affect Taiwan proper on Tuesday, lasting until Friday, and could develop into a moderate typhoon on Wednesday or Thursday, it said. A sea warning for Gaemi could be issued as early as Tuesday morning, it added. Gaemi, the third tropical storm in the Pacific Ocean this typhoon season, is projected to begin moving northwest today, and be closest to Taiwan on Wednesday or Thursday, the agency said. Today, there would likely
DISRUPTIONS: The high-speed rail is to operate as normal, while several airlines either canceled flights or announced early departures or late arrivals Schools and offices in 15 cities and counties are to be closed today due to Typhoon Gaemi, local governments announced last night. The 15 are: Taipei, New Taipei City, Taoyuan, Tainan, Keelung, Hsinchu and Kaohsiung, as well as Yilan, Hualien, Hsinchu, Miaoli, Chiayi, Pingtung, Penghu and Lienchiang counties. People should brace for torrential rainfall brought by the storm, with its center forecast to make landfall on the east coast between tonight and tomorrow morning, the Central Weather Administration (CWA) said. The agency issued a sea warning for the typhoon at 11:30pm on Monday, followed by a land warning at 11:30am yesterday. As of
CASUALTY: A 70-year-old woman was killed by a falling tree in Kaohsiung as the premier warned all government agencies to remain on high alert for the next 24 hours Schools and offices nationwide are to be closed for a second day today as Typhoon Gaemi crosses over the nation, bringing torrential rain and whipping winds. Gaemi was forecast to make landfall late last night. From Tuesday night, its outer band brought substantial rainfall and strong winds to the nation. As of 6:15pm last night, the typhoon’s center was 20km southeast of Hualien County, Central Weather Administration (CWA) data showed. It was moving at 19kph and had a radius of 250km. As of 3pm yesterday, one woman had died, while 58 people were injured, the Central Emergency Operation Center said. The 70-year-old