The nation’s M1B and M2 money supply measures last month slowed from the previous month, as firms and individuals adjusted their portfolios on the expectation that the global monetary tightening cycle is over, the central bank said on Monday.
The narrow money supply measure M1B — which refers to cash, demand deposits and other liquid deposits — posted an annual growth rate of 3.03 percent, down from a 3.32 percent increase in October, while the broader measure M2 — which includes time deposits, time-saving deposits, foreign currency deposits, mutual funds and M1B — slowed to 5.33 percent from 5.7 percent, it said.
Commenting on the slowing growth rates in the two measures, Department of Economic Research Deputy Director-General Tsai Hui-mei (蔡惠美) said that while foreign portfolio managers last month evidently raised their holdings in local shares, domestic corporate players were not as interested, judging by the pace of capital repatriation.
Photo: CNA
Rather, local financial institutions increased their stakes in US dollar-based debt and securities to lock in higher yields that are widely expected to go down once the US Federal Reserve embarks on interest rate cuts, Tsai said.
During the first 11 months of the year, M1B rose 2.79 percent and M2 advanced 6.34 percent from a year earlier, central bank data showed.
The M2 growth rate over the 11 months still fell within the central bank’s target range of 2.5 percent to 6.5 percent, as funding activity in the private sector remained vibrant and the liquidity level in the entire market is still abundant — beneficial to consumption, the stock market and other investment activities.
The securities account balance, a major confidence gauge of local shares on the part of retail investors, gained NT$139.2 billion (US$4.48 billion) to NT$3.29 trillion last month from NT$3.15 trillion the previous month, ending three consecutive months of declines, the central bank said.
The increase came as people channeled money to the local bourse to participate in liquidity-driven rallies, Tsai said.
The TAIEX picked up 8.98 percent, or 1,432.58 points, last month as investors generally considered the inventory downcycle was drawing to a close for technology products.
The latest data also showed that foreign institutional investors’ New Taiwan dollar-denominated deposits last month increased by NT$15.3 billion to NT$199.6 billion from October, the highest in the past three months.
Tsai attributed the growth to companies and individuals cashing in time deposits and US dollar deposits while shifting to the NT dollar and US dollar-linked bonds and securities that could offer better returns.
It also came as the NT dollar last month appreciated 3.7 percent against the greenback as the Fed’s dovish-leaning monetary policy stance caused a sell-off of the US currency, she said.
Taiwan’s technology protection rules prohibits Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) from producing 2-nanometer chips abroad, so the company must keep its most cutting-edge technology at home, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. Kuo made the remarks in response to concerns that TSMC might be forced to produce advanced 2-nanometer chips at its fabs in Arizona ahead of schedule after former US president Donald Trump was re-elected as the next US president on Tuesday. “Since Taiwan has related regulations to protect its own technologies, TSMC cannot produce 2-nanometer chips overseas currently,” Kuo said at a meeting of the legislature’s
TECH WAR CONTINUES: The suspension of TSMC AI chips and GPUs would be a heavy blow to China’s chip designers and would affect its competitive edge Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s biggest contract chipmaker, is reportedly to halt supply of artificial intelligence (AI) chips and graphics processing units (GPUs) made on 7-nanometer or more advanced process technologies from next week in order to comply with US Department of Commerce rules. TSMC has sent e-mails to its Chinese AI customers, informing them about the suspension starting on Monday, Chinese online news outlet Ijiwei.com (愛集微) reported yesterday. The US Department of Commerce has not formally unveiled further semiconductor measures against China yet. “TSMC does not comment on market rumors. TSMC is a law-abiding company and we are
FLEXIBLE: Taiwan can develop its own ground station equipment, and has highly competitive manufacturers and suppliers with diversified production, the MOEA said The Ministry of Economic Affairs (MOEA) yesterday disputed reports that suppliers to US-based Space Exploration Technologies Corp (SpaceX) had been asked to move production out of Taiwan. Reuters had reported on Tuesday last week that Elon Musk-owned SpaceX had asked their manufacturers to produce outside of Taiwan given geopolitical risks and that at least one Taiwanese supplier had been pushed to relocate production to Vietnam. SpaceX’s requests place a renewed focus on the contentious relationship Musk has had with Taiwan, especially after he said last year that Taiwan is an “integral part” of China, sparking sharp criticism from Taiwanese authorities. The ministry said
US President Joe Biden’s administration is racing to complete CHIPS and Science Act agreements with companies such as Intel Corp and Samsung Electronics Co, aiming to shore up one of its signature initiatives before US president-elect Donald Trump enters the White House. The US Department of Commerce has allocated more than 90 percent of the US$39 billion in grants under the act, a landmark law enacted in 2022 designed to rebuild the domestic chip industry. However, the agency has only announced one binding agreement so far. The next two months would prove critical for more than 20 companies still in the process
RSS