Interest rates remain unchanged for 11th quarter
By Ted Chen, The China Post
March 28, 2014, 12:08 am TWN
TAIPEI, Taiwan -- Following its first-quarter board of directors meeting the Central Bank of the Republic of China yesterday announced that interest rates will remain unchanged for the 11th consecutive quarter.
The central bank yesterday stated that the rediscount rate, the rate on accommodations with collateral and the rate on the short accommodations without collateral is set at 1.875 percent, 2.25 percent and 4.125 percent respectively, remaining unchanged for the 11th consecutive quarter since September 2011.
The central bank explained that amid moderate economic growth and inflation, current monetary policies are deemed ideal for stabilizing Taiwan's financial sector and the price of consumer goods.
In response to hints suggesting the growing likelihood of impending interest rate hikes by the South Korean central bank, Perng emphasized that he had issued similar warnings to the public well in advance of his counterpart.
Perng Voices Support for Cross-strait Trade Pact
Most notably, Perng yesterday voiced his support for the Cross-Strait Trade in Services Agreement, stating that Taiwan must surmount protectionism sentiments in order to progress towards prosperity.
According to Perng, rivaling South Korea currently has nine active free trade agreements that encompasses 36.3 percent of its exports, while Taiwan's six free trade agreements represents a paltry 9.3 percent of exports.
Protectionism will only marginalize Taiwan's role in international commerce and exacerbate current unemployment woes, said Perng. In addition, free trade agreements have always involved give-and-take, said Perng, emphasizing that a staunch protectionist stance will contribute little to negotiation efforts. Current setbacks of the services industries component will also hinder future progress on the follow-up Cross-Strait Trade in Goods Agreement, affecting the employment prospects of industries, warned Perng.
Beijing currently imposes a 5-percent tariff on imports of display panels, said Perng. If South Korea manages to finalize a free trade agreement with China, the 5-percent tariff advantage will spell doom for Taiwanese suppliers, affecting the livelihood of the 100,000 workers employed by the display panel industry.
In addition, on the specifics of the service industries trade agreement, Perng stated that he consider the terms offered by China to be more favorable than the requirements of World Trade Organization guidelines. China has opened up 80 service industry sectors compared to Taiwan's 64, of which all have been opened to other nations of the world, said Perng. He added that as of January, 264 investment visas have been granted to managers of PRC nationality, who are expected to create 9,624 jobs in Taiwan.
Perng also emphasized that the completion of negotiations with China will pave the way toward other regional trade pacts such as the Regional Comprehensive Economic Partnership (RCEP) and the Trans-Pacific Partnership (TPP). On whether his views will incite the spread of protests to the central bank, Perng replied that rational acknowledgment of the facts will prevail over heated sentiments.
Banking Industry Urges Swift Approval of Cross-strait Agreement
Meanwhile, Lee Jih-chu (李紀珠), chairwoman of the Bankers Association, R.O.C. yesterday urged for a swift and peaceful conclusion to current discord and for the legislative body to resume its functions. According to Lee, amid the confines of a competitive and highly saturated local market, Taiwan's banking sector last year still managed to yield stellar profits exceeding NT$200 billion. Taiwan's banking sector does not shirk from competition, said Lee, while adding that the trade pact will garner additional annual revenues of US$400 million while expanding channels to enable the 250 billion yuan held by Taiwanese businesses operating in China to flow back to Taiwan.