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September consumer prices fall on vegetable, clothing costs

September consumer prices fall on vegetable, clothing costs

Taiwan's consumer prices fell the most in more than three years in September as vegetable and clothing costs declined.
The consumer price index dropped 1.22 percent from a year earlier after slipping a revised 0.56 percent in August, the statistics bureau said today in Taipei. Economists expected a 0.4 percent decline, according to the median of 20 forecasts collected by Bloomberg News.
Sliding prices may give the central bank room to pause after raising interest rates to a five-year high even as economic growth slowed. The government may lower its forecast for full-year inflation as soon as next month, statistics bureau spokesman Wu Chao-ming said yesterday.
"There's a big chance that the government will lower the consumer price growth forecast for this year," said Wu at a briefing in Taipei. The statistics bureau in August predicted full-year inflation of 1.8 percent.
Foreign reserves up again
Taiwan's foreign-currency reserves rose to a record US$261.6 billion in September, boosted by returns from foreign-exchange management, the Central Bank of China said.
The island is the world's third-largest holder of foreign- currency reserves.
Taiwan's reserves, which trail those of China and Japan, rose from a previous record of US$261 billion in August, the central bank said in a statement in Taipei today.
Asustek upgraded to 'buy'
Asustek Computer Inc., the world's largest maker of boards which connect components in a computer, was upgraded to "buy" from "neutral" by Merrill Lynch & Co., which cited improving margins.
"We expect margins to recover in the second half and we expect earnings to accelerate in 2007," analyst Tony Tseng said in a telephone interview today. Merrill Lynch has a 12-month price target of NT$91 on Taipei-based Asustek.
Merrill Lynch estimates the company's operating margin, or the percentage of sales left after deducting the cost of goods sold and administrative expenses, will rise to 3.9 percent in the second half of this year and 4.1 percent in the first half of 2007, from 3.6 percent in the six months ended June 30.
Revenue will expand 30 percent next year, driven by sales of consumer devices, Tseng wrote in a report dated Wednesday.


Updated : 2020-11-30 07:36 GMT+08:00