Responding to rising inflation, the central bank is likely to raise its benchmark interest rate by another 12.5 basis points when its board meets late this month, a report by Taipei-based Polaris Research Institute said yesterday.
The US Federal Reserve's aggressive interest rate cuts have resulted in record-high capital inflows to Taiwan and strengthened the NT dollar's appreciation against the greenback, which has helped the nation deal with the soaring price of imported goods, the report said.
With the NT likely to keep gaining strength and no signs that the nation's inflation has eased, Polaris said the central bank was expected to raise its benchmark interest rate by another 0.125 percentage point from 3.375 percent to an estimated 3.5 percent on March 27 during its quarterly board meeting, the report said.
As a result of rising food and fuel prices, the consumer price index (CPI) rose 3.89 percent last month to another high of 104.26 since December, Directorate General of Budget, Accounting and Statistics data released early this month showed.
Although the core CPI, excluding food and fuel prices, slightly declined from January's 2.71 percent to 2.65 percent last month, it remained the nation's second-highest core CPI in the past nine years and above a 2 percent level in five consecutive months -- signs of increasing inflationary pressures, the report said.
Rising prices of international raw materials and a lower CPI basis will continue to drive up the nation's inflation in the first half of this year, forcing the central bank to continue to raise interest rates to fight inflation, Polaris said.
It said previous capital outflows had eased since the Fed's fund interest rate was cut to 3 percent, with another rate cut expected tomorrow, to narrow the margin of interest rates between these two countries.
Also see: US Fed expected to cut rate anew
ISSUES: Gogoro has been struggling with ballooning losses and was recently embroiled in alleged subsidy fraud, using Chinese-made components instead of locally made parts Gogoro Inc (睿能創意), the nation’s biggest electric scooter maker, yesterday said that its chairman and CEO Horace Luke (陸學森) has resigned amid chronic losses and probes into the company’s alleged involvement in subsidy fraud. The board of directors nominated Reuntex Group (潤泰集團) general counsel Tamon Tseng (曾夢達) as the company’s new chairman, Gogoro said in a statement. Ruentex is Gogoro’s biggest stakeholder. Gogoro Taiwan general manager Henry Chiang (姜家煒) is to serve as acting CEO during the interim period, the statement said. Luke’s departure came as a bombshell yesterday. As a company founder, he has played a key role in pushing for the
CROSS-STRAIT TENSIONS: The US company could switch orders from TSMC to alternative suppliers, but that would lower chip quality, CEO Jensen Huang said Nvidia Corp CEO Jensen Huang (黃仁勳), whose products have become the hottest commodity in the technology world, on Wednesday said that the scramble for a limited amount of supply has frustrated some customers and raised tensions. “The demand on it is so great, and everyone wants to be first and everyone wants to be most,” he told the audience at a Goldman Sachs Group Inc technology conference in San Francisco. “We probably have more emotional customers today. Deservedly so. It’s tense. We’re trying to do the best we can.” Huang’s company is experiencing strong demand for its latest generation of chips, called
China has claimed a breakthrough in developing homegrown chipmaking equipment, an important step in overcoming US sanctions designed to thwart Beijing’s semiconductor goals. State-linked organizations are advised to use a new laser-based immersion lithography machine with a resolution of 65 nanometers or better, the Chinese Ministry of Industry and Information Technology (MIIT) said in an announcement this month. Although the note does not specify the supplier, the spec marks a significant step up from the previous most advanced indigenous equipment — developed by Shanghai Micro Electronics Equipment Group Co (SMEE, 上海微電子) — which stood at about 90 nanometers. MIIT’s claimed advances last
GLOBAL ECONOMY: Policymakers have a choice of a small 25 basis-point cut or a bold cut of 50 basis points, which would help the labor market, but might reignite inflation The US Federal Reserve is gearing up to announce its first interest rate cut in more than four years on Wednesday, with policymakers expected to debate how big a move to make less than two months before the US presidential election. Senior officials at the US central bank including Fed Chairman Jerome Powell have in recent weeks indicated that a rate cut is coming this month, as inflation eases toward the bank’s long-term target of two percent, and the labor market continues to cool. The Fed, which has a dual mandate from the US Congress to act independently to ensure