Taipei, July 25, 2008 (CENS)--Domestic prices will become more stabilized in the second half, thanks to expected international oil-price drop and higher comparison base, said Perng Fai-nan, governor of the Central Bank of China (CBC) yesterday (July 24).

Perng predicted that crude-oil prices will drop to US$100-110 per barrel, compared with US$124 yesterday, next year, citing internal research of the CBC. He attributed the current soaring oil prices to speculation and anticipatory mentality, noting that oil supply and demand on the global market is actually rather balanced.

He admitted that inflationary pressure at present is quite high, due to oil and power-rate hikes and the effect of typhoon. He stressed, though, that Taiwan`s inflationary situation is relatively stable, compared to, for instance, a 7-7.5% CPI (consumer price index) hike in Malaysia.

Insiders noted that with the real NT dollar interest rate remaining negative now, the CBC may raise interest rate again by 0.125 of a percentage point at the regular meeting of its board of directors and supervisors in September.
(by Philip Liu)