Taipei, March 10, 2010 (CENS)--To dampen housing speculation, the Central Bank of China (CBC) may impose selective credit control on housing loans, according to Chinese-language Economic Daily News (EDN), sister publication of Taiwan Economic News (EDN).

EDN reported today (March 10) that the board of directors and supervisors of the CBC may discuss such selective credit control, including restriction on the percentage and term of loans for houses with exorbitant prices, so as to induce idle funds to productive purposes and avoid the formation of assets bubble. In addition, the CBC may embrace various policy tools to mop up excess idle funds on the market, which has been blamed by many as the major culprit for bloated housing prices.

Market players pointed to the unusual moves of the CBC recently, including the requirement on Monday (March 8) for domestic banks to provide information on their housing-loan extension, including interest rate, percentage, grace period for repayment, and definition of housing investors. Meanwhile, it has been inducing upward movement of the interest rates of overnight call loans among banks, which advanced to 0.123% yesterday (March 9), a 10-month high. In addition, it has retrieved NT$110 billion of funds circulating on the market since March 1, mainly via the issuance of negotiable certificates of deposits.

(by Philip Liu)