A stronger US dollar is taking a toll on the local currency by fueling volatility on local financial markets and adding pressure to imported inflation, a phenomenon the central bank will address at its quarterly board meeting next month, central bank Deputy Governor Yen Tzung-ta (嚴宗大) said yesterday.
As of yesterday, the New Taiwan dollar had tumbled 7.51 percent against the greenback this year, as the US Federal Reserve tightens to curb inflation.
Since the beginning of the year, the TAIEX has shed 12.32 percent as global funds retreated from Taiwan and other emerging markets in the pursuit of better yields elsewhere.
Photo: Lo Pei-der, Taipei Times
The weighted index yesterday closed 1.7 percent lower at 16,020.32 points, Taiwan Stock Exchange data showed.
“The trend not only weighed on the NT dollar, but also hit the currencies of other emerging economies and augmented their debt problems,” Yen told a meeting of the legislature’s Economics Committee.
Yen refused to be pinned down about the central bank’s policy intentions, only saying that the board meeting on June 16 has the final say on the matter.
Consumer prices and the inflation outlook sit atop the central bank’s list of concerns, while the job market and GDP growth would also guide the decisionmaking process, he said.
Taiwan’s consumer prices are forecast to pick up by more than 2 percent this year after rising faster than 3 percent in the past two months, mainly due to spiking international energy and commodity prices, the deputy governor said.
Inflationary pressures could ease in the second half of the year alongside a receding base effect, he added.
The US and Europe have to make drastic policy moves to bring down inflation induced by their money-printing programs to shore up their economies amid the COVID-19 pandemic, Yen said.
Inflationary readings are relatively moderate in Taiwan, giving policymakers room to look at things from a different perspective, he said.
Central bank Governor Yang Chin-long (楊金龍) last week said that Taiwan might have difficulty achieving a GDP growth of 4 percent this year, as worsening inflation, global monetary tightening and the Ukraine war could hurt exports and corporate profit from the second half of the year.
Yen agreed, saying that resurgent virus outbreaks worldwide pose further uncertainty.
Surging daily cases of the Omicron variant of SARS-CoV-2, which hit 90,331 yesterday, have prompted people to stay home, slowing recovery for sectors reliant on domestic demand.
Yen hinted that the central bank might intervene in the local foreign exchange market to help stabilize the NT dollar.
ROLLER-COASTER RIDE: More than five earthquakes ranging from magnitude 4.4 to 5.5 on the Richter scale shook eastern Taiwan in rapid succession yesterday afternoon Back-to-back weather fronts are forecast to hit Taiwan this week, resulting in rain across the nation in the coming days, the Central Weather Administration said yesterday, as it also warned residents in mountainous regions to be wary of landslides and rockfalls. As the first front approached, sporadic rainfall began in central and northern parts of Taiwan yesterday, the agency said, adding that rain is forecast to intensify in those regions today, while brief showers would also affect other parts of the nation. A second weather system is forecast to arrive on Thursday, bringing additional rain to the whole nation until Sunday, it
CONDITIONAL: The PRC imposes secret requirements that the funding it provides cannot be spent in states with diplomatic relations with Taiwan, Emma Reilly said China has been bribing UN officials to obtain “special benefits” and to block funding from countries that have diplomatic ties with Taiwan, a former UN employee told the British House of Commons on Tuesday. At a House of Commons Foreign Affairs Committee hearing into “international relations within the multilateral system,” former Office of the UN High Commissioner for Human Rights (OHCHR) employee Emma Reilly said in a written statement that “Beijing paid bribes to the two successive Presidents of the [UN] General Assembly” during the two-year negotiation of the Sustainable Development Goals. Another way China exercises influence within the UN Secretariat is
LANDSLIDES POSSIBLE: The agency advised the public to avoid visiting mountainous regions due to more expected aftershocks and rainfall from a series of weather fronts A series of earthquakes over the past few days were likely aftershocks of the April 3 earthquake in Hualien County, with further aftershocks to be expected for up to a year, the Central Weather Administration (CWA) said yesterday. Based on the nation’s experience after the quake on Sept. 21, 1999, more aftershocks are possible over the next six months to a year, the agency said. A total of 103 earthquakes of magnitude 4 on the local magnitude scale or higher hit Hualien County from 5:08pm on Monday to 10:27am yesterday, with 27 of them exceeding magnitude 5. They included two, of magnitude
Taiwan’s first drag queen to compete on the internationally acclaimed RuPaul’s Drag Race, Nymphia Wind (妮妃雅), was on Friday crowned the “Next Drag Superstar.” Dressed in a sparkling banana dress, Nymphia Wind swept onto the stage for the final, and stole the show. “Taiwan this is for you,” she said right after show host RuPaul announced her as the winner. “To those who feel like they don’t belong, just remember to live fearlessly and to live their truth,” she said on stage. One of the frontrunners for the past 15 episodes, the 28-year-old breezed through to the final after weeks of showcasing her unique