Taiwan’s central bank president Yang Jinlong warned that the real economy and financial markets appear to be decoupled, and there is even concern about asset bubbles. The central bank also announced today (25) that from February next year, the monthly bidding amount for 2-year certificates of deposit will be increased. An increase of 20 billion yuan from the current 40 billion yuan per month to 60 billion yuan, while the 364-day deposit certificate bidding amount remains unchanged at 170 billion yuan, indicating that there is too much liquidity in the market to expand the recovery of idle funds.
Yang Jinlong pointed out that the ultra-loose monetary policy brought about by the new crown pneumonia epidemic has caused severe turbulence in the financial market. It is observed that the real economy is still relatively sluggish, but some financial markets have rebounded strongly, and the real economy and the financial market seem to have decoupled.
Yang Jinlong is worried that the ultra-loose environment may aggravate financial instability and may even have doubts about asset bubbles.
In response to the asset allocation needs of financial institutions, the central bank will increase the monthly bidding amount of 2-year certificates of deposit by 20 billion yuan from February next year, while the 364-day certificates of deposit will remain unchanged.
At the same time, the central bank pointed out that in January next year, in response to Lunar New Year factors, 364-day CDs will be renewed by 100 billion yuan, a decrease of 70 billion yuan from usual. The issuance of 2-year CDs will be suspended once, and the standard will be resumed in February. Sold 170 billion yuan of 364-day CDs and 60 billion yuan of 2-year CDs.