Perng Fai-nan (
Perng made the remarks yesterday at the Legislature while fielding questions raised by KMT lawmaker Kuo Su-chun (
Perng said the local currency should be decided by the market, adding that the fast depreciation of the local currency will only create uncertainty and instability in the financial markets.
In responding to Kuo's question as to what extent the central bank will change its current monetary policy to boost the island's sagging economy, Perng said that the monetary policy is not "panacea" for current economic woes, adding that it may need a set of monetary and economic policies working together for economic recovery.
While lawmakers still aired their anger against central bank deputy governor Chen Shih-meng's (
Chen told local media Saturday that a "limited depreciation of the currency" is possible given the island's weak economic performance.
But when lawmaker Kuo said she believed that Chen was acting like a "shadow governor" in the central bank, Perng immediately replied "I am the real one."
The NT dollar gained 0.1 percent to NT$33.965 against the US dollar yesterday on expectation the central bank would step in to defend the currency against further weakness. Another central bank deputy governor Hsu Yi-hsiung (徐義雄) said Tuesday that the bank is ready to intervene if necessary.
Analysts say that the central bank will intervene because letting the NT dollar tumble would erode investor confidence. But they believe the gains of the NT dollar against the greenback may be short-lived because what the central bank intends to do is control the depreciation of the currency rather than stop it. Some pundits say a weaker currency is needed to help exporters' profits and raise economic growth. The government has said it expects exports to fall 5 percent this year after growing 22 percent in 2000.
Meanwhile, officials at the Ministry of Economic Affairs said devaluation could only help spur exports for a short period of time, and would likely trigger a competitive devaluation of other currencies in the region.
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