The central bank yesterday lowered key interest rates for the second time this month following a bigger move by its US counterpart overnight, citing concern over an increasingly gloomy economic picture at home.
The rate cut, the third of its kind since Sept. 26 and declared before the start of equities trade, effectively boosted investors’ confidence as the TAIEX and New Taiwan dollar both staged a strong rebound.
In yet another unscheduled news conference early yesterday morning, central bank Governor Perng Fai-nan (彭淮南) said the bank’s board decided to reduce the discount rate, the rate on accommodations with collateral and the rate on accommodations without collateral by 25 basis points each to 3 percent, 3.375 percent and 5.25 percent respectively.
The new rates would take effect immediately, the top monetary regulator said, adding that dwindling economic activity prompted the central bank to make the adjustments.
“The rate cut is expected to help spur economic growth,” Perng said. “The downside risks loom larger as evidenced by falling exports as well as industrial output and rising jobless rates.”
The unemployment rate hit a four-year high of 4.27 percent last month, up 0.13 percentage points from August, defying a seasonal drop in unemployment normally seen at the end of summer. Exports, in the meantime, declined by 1.6 percent for the first time in six-and-half years as the US financial crisis threatened to plunge the world economy into recession.
Perng said that the rate cut would not fuel inflationary pressures as consumer price growth had slowed for two straight months and was expected to decrease further for the rest of the year.
On the back of the rate cut news, the stock market shot up 277.12 points, or 6.28 percent, to close at 4,683.14 yesterday, on turnover of NT$67.7 billion (US$2.06 billion).
Foreign funds, which have been steadily pulling out of Asian markets in the wake of the credit crunch, bought a net NT$735 million in local shares, the Taiwan Stock Exchange’s data showed.
Likewise, the local currency picked up 1.5 percent, or NT$0.496, to close at NT$32.799 against the greenback yesterday on turnover of NT$3.892 billion, the third largest in foreign exchange history.
Trading was valued at US$3.32 billion on the Taipei Forex Inc and US$563 million on the smaller Cosmos Foreign Exchange, data from the two companies showed.
A trader at the Union Bank of Taiwan (聯邦銀行) attributed the rise in the NT dollar to technically weakening demand for the US dollar across the board, and said the trend would not last long.
The domestic unit of the Chinese-owned, Dutch-headquartered chipmaker Nexperia BV will soon be able to produce semiconductors locally within China, according to two company sources. Nexperia is at the center of a global tug-of-war over critical semiconductor technology, with a Dutch court in February ordering a probe into alleged mismanagement at the company. The geopolitical tussle has disrupted supply chains, with some carmakers reportedly forced to cut production due to chip shortages. Local production would allow Nexperia’s domestic arm, Nexperia Semiconductors (China) Ltd (安世半導體中國), to bypass restrictions in place since October on the supply of silicon wafers — etched with tiny components to
Taiwan is open to joining a global liquefied natural gas (LNG) program if one is created, but on the condition that countries provide delivery even in a scenario where there is a conflict with China, an energy department official said yesterday. While Taiwan’s priority is to have enough LNG at home, the nation is open to exploring potential strategic reserves in other countries such as Japan or South Korea, Energy Administration Deputy Director-General Chen Chung-hsien (陳崇憲) said. While the LNG market does not have a global reserve for emergencies like that of oil, the concept has been raised a few times —
AI-FUELED DEMAND: The company has been benefiting from the skyrocketing prices for DRAM chips amid the AI frenzy, especially its core product — DDR4 DRAM chips DRAM chipmaker Nanya Technology Corp (南亞科技) yesterday reported that its revenue for the first quarter surged 582.91 percent to NT$49.09 billion (US$1.54 billion) from NT$7.19 billion a year earlier, as the supply crunch caused chip price spikes. Last quarter’s figure is the highest on record. On a quarterly basis, revenue jumped 63.14 percent from NT$30.09 billion, the company said. In January, Nanya Technology expected global DRAM supply scarcity to continue through the first half of 2028, thanks to strong demand for artificial intelligence (AI) applications. Market researcher TrendForce Corp (集邦科技) forecast prices of standard DRAM chips would rise between 58 percent and 63
HIGHER PRICES: Given rising energy costs, CPC raised natural gas prices for generators by 41.58%, which Taipower said would raise its power generation costs by NT$10 billion State-run CPC Corp, Taiwan (CPC, 台灣中油) has activated its fourth naphtha cracker to boost ethylene supply, aiming to ease concerns over plastic material shortages amid tensions in the Middle East, the Ministry of Economic Affairs said yesterday. The move is expected to add 19,000 tonnes of supply this month and 30,000 tonnes next month, Deputy Minister of Economic Affairs Ho Chin-tsang (何晉滄) said at a meeting of the legislature’s Economics Committee in Taipei. CPC on Tuesday held talks with major polyethylene producers, including Formosa Plastics Corp (台塑), Asia Polymer Corp (亞聚) and USI Corp (台聚), and pledged to supply ethylene feedstock
RSS