A stronger US dollar is taking a toll on the local currency by fueling volatility on local financial markets and adding pressure to imported inflation, a phenomenon the central bank will address at its quarterly board meeting next month, central bank Deputy Governor Yen Tzung-ta (嚴宗大) said yesterday.
As of yesterday, the New Taiwan dollar had tumbled 7.51 percent against the greenback this year, as the US Federal Reserve tightens to curb inflation.
Since the beginning of the year, the TAIEX has shed 12.32 percent as global funds retreated from Taiwan and other emerging markets in the pursuit of better yields elsewhere.
Photo: Lo Pei-der, Taipei Times
The weighted index yesterday closed 1.7 percent lower at 16,020.32 points, Taiwan Stock Exchange data showed.
“The trend not only weighed on the NT dollar, but also hit the currencies of other emerging economies and augmented their debt problems,” Yen told a meeting of the legislature’s Economics Committee.
Yen refused to be pinned down about the central bank’s policy intentions, only saying that the board meeting on June 16 has the final say on the matter.
Consumer prices and the inflation outlook sit atop the central bank’s list of concerns, while the job market and GDP growth would also guide the decisionmaking process, he said.
Taiwan’s consumer prices are forecast to pick up by more than 2 percent this year after rising faster than 3 percent in the past two months, mainly due to spiking international energy and commodity prices, the deputy governor said.
Inflationary pressures could ease in the second half of the year alongside a receding base effect, he added.
The US and Europe have to make drastic policy moves to bring down inflation induced by their money-printing programs to shore up their economies amid the COVID-19 pandemic, Yen said.
Inflationary readings are relatively moderate in Taiwan, giving policymakers room to look at things from a different perspective, he said.
Central bank Governor Yang Chin-long (楊金龍) last week said that Taiwan might have difficulty achieving a GDP growth of 4 percent this year, as worsening inflation, global monetary tightening and the Ukraine war could hurt exports and corporate profit from the second half of the year.
Yen agreed, saying that resurgent virus outbreaks worldwide pose further uncertainty.
Surging daily cases of the Omicron variant of SARS-CoV-2, which hit 90,331 yesterday, have prompted people to stay home, slowing recovery for sectors reliant on domestic demand.
Yen hinted that the central bank might intervene in the local foreign exchange market to help stabilize the NT dollar.
Super Typhoon Kong-rey is the largest cyclone to impact Taiwan in 27 years, the Central Weather Administration (CWA) said today. Kong-rey’s radius of maximum wind (RMW) — the distance between the center of a cyclone and its band of strongest winds — has expanded to 320km, CWA forecaster Chang Chun-yao (張竣堯) said. The last time a typhoon of comparable strength with an RMW larger than 300km made landfall in Taiwan was Typhoon Herb in 1996, he said. Herb made landfall between Keelung and Suao (蘇澳) in Yilan County with an RMW of 350km, Chang said. The weather station in Alishan (阿里山) recorded 1.09m of
NO WORK, CLASS: President William Lai urged people in the eastern, southern and northern parts of the country to be on alert, with Typhoon Kong-rey approaching Typhoon Kong-rey is expected to make landfall on Taiwan’s east coast today, with work and classes canceled nationwide. Packing gusts of nearly 300kph, the storm yesterday intensified into a typhoon and was expected to gain even more strength before hitting Taitung County, the US Navy’s Joint Typhoon Warning Center said. The storm is forecast to cross Taiwan’s south, enter the Taiwan Strait and head toward China, the Central Weather Administration (CWA) said. The CWA labeled the storm a “strong typhoon,” the most powerful on its scale. Up to 1.2m of rainfall was expected in mountainous areas of eastern Taiwan and destructive winds are likely
The Central Weather Administration (CWA) yesterday at 5:30pm issued a sea warning for Typhoon Kong-rey as the storm drew closer to the east coast. As of 8pm yesterday, the storm was 670km southeast of Oluanpi (鵝鑾鼻) and traveling northwest at 12kph to 16kph. It was packing maximum sustained winds of 162kph and gusts of up to 198kph, the CWA said. A land warning might be issued this morning for the storm, which is expected to have the strongest impact on Taiwan from tonight to early Friday morning, the agency said. Orchid Island (Lanyu, 蘭嶼) and Green Island (綠島) canceled classes and work
KONG-REY: A woman was killed in a vehicle hit by a tree, while 205 people were injured as the storm moved across the nation and entered the Taiwan Strait Typhoon Kong-rey slammed into Taiwan yesterday as one of the biggest storms to hit the nation in decades, whipping up 10m waves, triggering floods and claiming at least one life. Kong-rey made landfall in Taitung County’s Chenggong Township (成功) at 1:40pm, the Central Weather Administration (CWA) said. The typhoon — the first in Taiwan’s history to make landfall after mid-October — was moving north-northwest at 21kph when it hit land, CWA data showed. The fast-moving storm was packing maximum sustained winds of 184kph, with gusts of up to 227kph, CWA data showed. It was the same strength as Typhoon Gaemi, which was the most