The central bank toughened its monetary policy yesterday, hiking its benchmark interest rate by 0.125 percentage points and ordering lenders to put aside more saving reserves in an attempt to curb inflation stoked by surging fuel, food and raw material prices.
It was the 16th consecutive quarter since October 2004 that the monetary regulator had adjusted raised the rates as it seeks to stabilize commodity prices without hurting efforts by the new government to shore up domestic demand and the economy.
“It is the central bank’s prime duty to maintain stability of consumer prices,” Governor Perng Fai-nan (彭淮南) told a news conference after a quarterly board meeting. “We have not stayed on the sidelines in the battle against inflation as some in the media have claimed.”
Perng said the central bank decided to raise the discount rate, at which local banks borrow 10-day loans from it, by 12.5 basis points to 3.625 percent, starting today.
Meanwhile, the rates on accommodations with collateral and without collateral will rise to 4 percent and 5.875 percent, respectively, up from their current 3.875 percent and 5.75 percent.
Perng said he hoped the adjustments could contain consumer price growth that reached 3.66 percent in the first five months of this year and is expected to advance further as utility costs are due to rise by 12.6 percent next month.
The central bank also required lenders to set aside more cash in reserves, lifting the ratio on passbook savings by 1.25 percentage points and term deposits by 0.75 points, beginning July 1, Perng said.
He added that the move, intended to check liquidity in the market, will not harm the economic stimulus package proposed by the Chinese Nationalist Party (KMT) administration to boost private consumption and investment.
However, Perng voiced reservations the spending program will push the GDP up to 4.78 percent for this year as the nation’s statistics agency has predicted.
The central bank put the figure at 4.66 percent, he said.
Also See: Central bank to continue fiscal tightening: analysts
Tropical Storm Usagi strengthened to a typhoon yesterday morning and remains on track to brush past southeastern Taiwan from tomorrow to Sunday, the Central Weather Administration (CWA) said yesterday. As of 2pm yesterday, the storm was approximately 950km east-southeast of Oluanpi (鵝鑾鼻), Taiwan proper’s southernmost point, the CWA said. It is expected to enter the Bashi Channel and then turn north, moving into waters southeast of Taiwan, it said. The agency said it could issue a sea warning in the early hours of today and a land warning in the afternoon. As of 2pm yesterday, the storm was moving at
UPDATED FORECAST: The warning covered areas of Pingtung County and Hengchun Peninsula, while a sea warning covering the southern Taiwan Strait was amended The Central Weather Administration (CWA) at 5:30pm yesterday issued a land warning for Typhoon Usagi as the storm approached Taiwan from the south after passing over the Philippines. As of 5pm, Usagi was 420km south-southeast of Oluanpi (鵝鑾鼻), Taiwan proper’s southernmost tip, with an average radius of 150km, the CWA said. The land warning covered areas of Pingtung County and the Hengchun Peninsula (恆春), and came with an amended sea warning, updating a warning issued yesterday morning to cover the southern part of the Taiwan Strait. No local governments had announced any class or office closures as of press time last night. The typhoon
DISCONTENT: The CCP finds positive content about the lives of the Chinese living in Taiwan threatening, as such video could upset people in China, an expert said Chinese spouses of Taiwanese who make videos about their lives in Taiwan have been facing online threats from people in China, a source said yesterday. Some young Chinese spouses of Taiwanese make videos about their lives in Taiwan, often speaking favorably about their living conditions in the nation compared with those in China, the source said. However, the videos have caught the attention of Chinese officials, causing the spouses to come under attack by Beijing’s cyberarmy, they said. “People have been messing with the YouTube channels of these Chinese spouses and have been harassing their family members back in China,”
At least 35 people were killed and dozens more injured when a man plowed his car into pedestrians exercising around a sports center in the southern Chinese city of Zhuhai on Monday night. Footage showing bodies lying on the pavement appeared on social media in the hours after the crash, but had vanished by early Tuesday morning, and local police reported only “injuries.” It took officials nearly 24 hours to reveal that dozens had died — in one of the country’s deadliest incidents in years. China heavily monitors social media platforms, where it is common for words and topics deemed
RSS