The New Taiwan dollar fell below 32 yuan last Friday, hitting a 10-month low, signaling a low chance of the central bank raising interest rates next week. The picture shows a schematic diagram. (Photo by Chen Junwei)
The New Taiwan dollar fell below 32 yuan, hitting a 10-month low, adding to the topic of the central bank’s Board of Supervisors meeting next Thursday. Huiyin and scholars generally believe that domestic prices are slowing down quarter by quarter, and with the general election around the corner, the chance of interest rate hikes is “extremely low.” However, the depreciation of the New Taiwan dollar will inevitably cause import prices to rise, which may cause inflation to resume and the central bank will be involved in bailing out exports. Or consider the dilemma between inflation.
U.S. economic data remains strong, with the specter of the Fed continuing to raise interest rates lingering. As government bond yields rose, foreign capital continued to remit money last Friday, causing the New Taiwan dollar to fall below the NT$32 mark. It ended at NT$32.008, a record high of more than 10 Monthly low. The total depreciation in a single week was 1.47 cents or 0.46%, and the weekly decline was two consecutive losses.
The U.S. dollar is strong again. The U.S. Department of Labor recently announced that non-farm employment increased by 187,000 people in August, which was higher than expected. Major institutions revised upward the U.S. economic growth rate. On the other hand, the personal consumption expenditures price index (PCE) increased by 3.3% annually. The core PCE price index increased by 4.2% year-on-year, and the fire of inflation has not been extinguished. It is estimated that the Fed will still have room to raise interest rates by 1 point by the end of the year.
Compared with the Fed, which still has room to raise interest rates, which supports the strength of the US dollar, the New Taiwan dollar cannot even hold the 32 yuan mark. Huiyin interprets that foreign capital has actually made the judgment that “the central bank will not raise interest rates,” so the New Taiwan dollar will plummet like a free fall with almost no support, and because foreign capital also sees that as the election is getting closer, at this time Raising interest rates will undoubtedly arouse public dissatisfaction, making it difficult for the central bank to focus on raising interest rates.
Wu Mengdao, director of the Sixth Research Institute of the National Taiwan Economic Academy, believes that although this year’s economic growth rate cannot be “guaranteed to 2”, the General Accounting Office predicts that the full-year GDP will still be 1.61%. It is estimated that as prices slow down, the central bank seems to be on hold in September. has also become higher, and as the general election is getting closer, it is expected that there will be a chance not to raise interest rates in December.
Huiyin believes that although inflation has slowed down, as international oil prices continue to rise, “it’s not yet, it’s not yet.” In particular, many of Taiwan’s imported materials are priced in US dollars. If the New Taiwan dollar is too weak, it will definitely push up imports. Prices will also lead to a resurgence of inflation that has finally cooled down. If the central bank does not raise interest rates, it will still have to use real gold and silver to prevent the New Taiwan Dollar from being too weak.
2023-09-10 20:10:00
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