Central bank Governor Perng Fai-nan (彭淮南) is expected to propose an "Asian currency mechanism" when he attends the Asian Development Bank's 34th annual conference this week.
Perng, who has also previously proposed such a scheme, will put forth the agenda at the Asian Bank's annual conference, which will be held in Honolulu, Hawaii, and run Wednesday through Friday.
Perng has previously said that a regional currency mechanism will help defend Asian currencies against potential speculative attacks from hedge fund managers, which many now say partially contributed to the Asian currency crisis in 1997 and 1998.
Taiwan, a founding member of the Asian Bank, is still part of the regional organization, though under the name of Taipei, China.
Sources within the central bank said Perng will also suggest that Taiwan be a member of the grouping, if such a mechanism is in fact put into place, thanks to the nation's massive foreign exchange reserves.
Taiwan's foreign exchange reserves stood at US$111.65 billion at the end of April, up US$1.015 billion from March's US$110.64 billion, according to data announced yesterday by the central bank.
While such a framework could work as an emergency measure, it may not help monitor the actual flow of capital in and out of Asian countries, analysts said. "It is relatively difficult to track the portfolio flows," said Julius Parrenas, an economist at the Taiwan Institute of Economic Research (台灣經濟研究院).
According to the US-based Institute of International Finance, the net capital inflow into the five most affected Asian countries -- South Korea, Thailand, Indonesia, Malaysia and the Philippines -- jumped from US$37.9 billion in 1994 to US$108 billion in 1996.
In 1997, these inflows suddenly reversed themselves, turning to outflows of US$0.2 billion and US$36.8 billion in 1998.
Taiwan's more prudent currency management scheme helped Taiwan better withstand the Asian financial crisis of 1997 and 1998, during which most of the Asian currencies tumbled.
While Taiwan has no specific capital controls, it continues to keep a close eye on the movement of portfolio capital in and out of its financial markets.
Indeed, reports said Perng has already suggested to his internal staff to seek the stability in the "twin rates" of interest and exchange during his absence.
With the US Federal Reserve Board expected to meet on May 15 to decide on interest rates, the central bank here is expected to keep the rates unchanged at least until May 13 when Perng is expected to return from his trip abroad.
Another leading issue at the conference will focus on activating the region's rather sleepy bond markets as a means of helping regional companies raise capital through fixed income and reduce their reliance on stock markets. Asian bond markets are relatively undeveloped compared to the vibrant stock markets in the region.
The Asian Development Bank will also discuss unifying the region's diverse banking regulatory standards such as the measurement of the non-performing loans and the implementation of financial supervision.
Perng's 14-member delegation includes Vice Minister of Finance Sean Chen (陳沖), Jeffrey Koo (辜濂松), chairman of the Chinatrust Commercial Bank (中國信託商銀) and adviser to the Executive Yuan and Wang Yao-hsing (王耀興), director general of the Bureau of Monetary Affairs under the Ministry of Finance. Koo, who is also a founder of the Asian Bankers Association, has long called for a stronger regional bond market.
CREDIT-GRABBER: China said its coast guard rescued the crew of a fishing vessel that caught fire, who were actually rescued by a nearby Taiwanese boat and the CGA Maritime search and rescue operations do not have borders, and China should not use a shipwreck to infringe upon Taiwanese sovereignty, the Coast Guard Administration (CGA) said yesterday. The coast guard made the statement in response to the China Coast Guard (CCG) saying it saved a Taiwanese fishing boat. The Chuan Yu No. 6 (全漁6號), a fishing vessel registered in Keelung, on Thursday caught fire and sank in waters northeast of Diaoyutai Islands (釣魚台). The vessel left Keelung’s Badouzih Fishing Harbor (八斗子漁港) at 3:35pm on Sunday last week, with seven people on board — a 62-year-old Taiwanese captain surnamed Chang (張) and six
The Legislative Yuan’s Finance Committee yesterday approved proposed amendments to the Amusement Tax Act (娛樂稅法) that would abolish taxes on films, cultural activities and competitive sporting events, retaining the fee only for dance halls and golf courses. The proposed changes would set the maximum tax rate for dance halls and golf courses at 50 and 20 percent respectively, with local governments authorized to suspend the levies. Article 2 of the act says that “amusement tax shall be levied on tickets sold or fees charged by amusement places, facilities or activities” in six categories: “Cinema; professional singing, story-telling, dancing, circus, magic show, acrobatics
RISKY BUSINESS: The ‘incentives’ include initiatives that get suspended for no reason, creating uncertainty and resulting in considerable losses for Taiwanese, the MAC said China’s “incentives” failed to sway sentiment in Taiwan, as willingness to work in China hit a record low of 1.6 percent, a Ministry of Labor survey showed. The Directorate-General of Budget, Accounting and Statistics (DGBAS) also reported that the number of Taiwanese workers in China has nearly halved from a peak of 430,000 in 2012 to an estimated 231,000 in 2024. That marked a new low in the proportion of Taiwanese going abroad to work. The ministry’s annual survey on “Labor Life and Employment Status” includes questions respondents’ willingness to seek employment overseas. Willingness to work in China has steadily declined from
Tainan, Taipei and New Taipei City recorded the highest fines nationwide for illegal accommodations in the first quarter of this year, with fines issued in the three cities each exceeding NT$7 million (US$220,639), Tourism Administration data showed. Among them, Taipei had the highest number of illegal short-term rental units, with 410. There were 3,280 legally registered hotels nationwide in the first quarter, down by 14 properties, or 0.43 percent, from a year earlier, likely indicating operators exiting the market, the agency said. However, the number of unregistered properties rose to 1,174, including 314 illegal hotels and 860 illegal short-term rental
RSS