The nation’s central bank is expected to leave key interest rates unchanged, but would increase restrictions on the property market to rein in market manipulation in its policymaking meeting this week, economists said.
At the last quarterly policymaking meeting held on March 21, the central bank surprisingly raised interest rates by 12.5 basis points, despite the US Federal Reserve maintaining its monetary policy a day earlier.
This time, the central bank is expected to leave interest rates unchanged in the meeting scheduled for Thursday.
Photo: Ann Wang, Reuters
The more than 2 percent growth in inflation was not necessarily problematic, as Taiwan’s inflation was relatively low compared with many other countries, Taiwan Institute of Economic Research (TIER, 台灣經濟研究院) economist Wu Meng-tao (吳孟道) cited central bank Governor Yang Chin-long (楊金龍) as saying.
Taiwan’s consumer price index (CPI) last month rose 2.24 percent from a year earlier, higher than the 2 percent central bank target.
In the first five months of this year, the CPI grew 2.24 percent, also topping the 2 percent target, the Directorate-General of Budget, Accounting and Statistics reported last week.
Major central banks around the world, including the Bank of Canada and the European Central Bank, started rate cut cycles last week, while the Fed is likely to follow suit at some point later this year, Wu said.
Under such circumstances, Taiwan’s central bank would likely leave its monetary policy unchanged in the near future, he said.
Asked whether the local central bank would continue hiking rates to suppress the booming property market, Wu said any rate increase would be implemented to cap inflation, rather than reducing property transactions.
TIER researcher Arisa Liu (劉佩真) said she expects the central bank to announce a sixth round of select credit controls on the local property market on Thursday.
The number of transactions of homes, offices and shops in the six special municipalities increased 30 percent in the first five months of this year from a year earlier, government data showed last week.
In addition, Liu said many semiconductor suppliers and artificial intelligence technology developers have been increasing their talent pools, further boosting the property market.
Land transactions in Taiwan soared about 164 percent from a year earlier in the first quarter of this year, local news media reported.
Liu said strong land purchase growth by property developers was evidence of their faith in the housing market.
Since December 2020, the central bank has launched five rounds of select credit controls on the local property market.
Liu said the central bank would likely come up with measures including reducing the ratio of mortgages to the prices of second homes to increase its grip on the property market.
The central bank is also likely to cap bank lending for land purchases, Liu added.
Nvidia Corp CEO Jensen Huang (黃仁勳) is expected to miss the inauguration of US president-elect Donald Trump on Monday, bucking a trend among high-profile US technology leaders. Huang is visiting East Asia this week, as he typically does around the time of the Lunar New Year, a person familiar with the situation said. He has never previously attended a US presidential inauguration, said the person, who asked not to be identified, because the plans have not been announced. That makes Nvidia an exception among the most valuable technology companies, most of which are sending cofounders or CEOs to the event. That includes
TARIFF TRADE-OFF: Machinery exports to China dropped after Beijing ended its tariff reductions in June, while potential new tariffs fueled ‘front-loaded’ orders to the US The nation’s machinery exports to the US amounted to US$7.19 billion last year, surpassing the US$6.86 billion to China to become the largest export destination for the local machinery industry, the Taiwan Association of Machinery Industry (TAMI, 台灣機械公會) said in a report on Jan. 10. It came as some manufacturers brought forward or “front-loaded” US-bound shipments as required by customers ahead of potential tariffs imposed by the new US administration, the association said. During his campaign, US president-elect Donald Trump threatened tariffs of as high as 60 percent on Chinese goods and 10 percent to 20 percent on imports from other countries.
Taiwanese manufacturers have a chance to play a key role in the humanoid robot supply chain, Tongtai Machine and Tool Co (東台精機) chairman Yen Jui-hsiung (嚴瑞雄) said yesterday. That is because Taiwanese companies are capable of making key parts needed for humanoid robots to move, such as harmonic drives and planetary gearboxes, Yen said. This ability to produce these key elements could help Taiwanese manufacturers “become part of the US supply chain,” he added. Yen made the remarks a day after Nvidia Corp cofounder and chief executive officer Jensen Huang (黃仁勳) said his company and Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) are jointly
MARKET SHIFTS: Exports to the US soared more than 120 percent to almost one quarter, while ASEAN has steadily increased to 18.5 percent on rising tech sales The proportion of Taiwan’s exports directed to China, including Hong Kong, declined by more than 12 percentage points last year compared with its peak in 2020, the Ministry of Finance said on Thursday last week. The decrease reflects the ongoing restructuring of global supply chains, driven by escalating trade tensions between Beijing and Washington. Data compiled by the ministry showed China and Hong Kong accounted for 31.7 percent of Taiwan’s total outbound sales last year, a drop of 12.2 percentage points from a high of 43.9 percent in 2020. In addition to increasing trade conflicts between China and the US, the ministry said
RSS