February 25, 2013
Taiwan Central Bank Gov. Perng Fai-nan was reappointed for a fourth term Feb. 23, making him the longest-serving head in the institution’s 89-year history.
Perng’s new term, which runs Feb. 26, 2013, to Feb. 25, 2018, comes as no surprise. His effective leadership is considered one of the key reasons for Taiwan weathering the Asian financial crisis of 1997 and global financial tsunami in late 2008.
The governor also boasts bipartisan appeal, holding the post under the former Democratic Progressive Party and ruling Kuomintang administrations.
With uncertainties on the global front going forward, including U.S. federal budget cuts set to take effect next month and the threat of an Asian currency war triggered by the depreciating yen, Perng’s policymaking over the next five years will determine his place in the country’s financial history.
According to market analysts, stability is Perng’s watchword, with low inflation, high earnings and stable exchange and interest rates his three main goals.
Statistics show that Taiwan’s annual inflation averaged 1 percent during Perng’s tenure commencing Feb. 25, 1998. When the figure approached 2 percent in 2012 due to several rounds of hikes in gasoline and electricity prices, as well as a lower comparison base from the year before, the central banker managed to keep it below the level with policy measures such as absorbing idle funds.
During the same period, the New Taiwan dollar’s rate against the greenback was kept between NT$35 and NT$28.50. The latter was dubbed the “Perng Fai-nan line,” and viewed as an almost unreachable ceiling for the local currency.
Checking real estate speculation is another top priority for Perng, with selective credit controls one of the governor’s tools of choice in damping skyrocketing property prices.