Perng Fai-nan

Biography

Perng Fai-nan (January 2, 1939 – ), born in Hsinchu City, Taiwan, is a renowned economist and veteran central banker of the Republic of China (ROC). He served as the Governor of the Central Bank of the ROC (Taiwan) from 1998 to 2018. With a tenure spanning 20 years, he is the longest-serving central bank governor in ROC history. He graduated with a B.A. in Economics from National Chung Hsing University (now National Taipei University) and earned an M.A. in Economics from the University of Minnesota, later receiving honorary doctorates from several universities.

Crisis Management and Fighting off the Financial Storm

In 1998, former Central Bank Governor Sheu Yuan-dong tragically passed away in the Dayuan plane crash. Perng, then-chairman of the Taiwan Cooperative Bank, was appointed to take over the governorship in a time of crisis. With the Asian Financial Crisis raging, Perng resolutely implemented the “Willow Theory” (exchange rates should behave like a willow tree, bending with the wind and returning to its original state after the wind passes) to maintain a flexible exchange rate. He also closed the domestic Non-Deliverable Forward (NDF) market, successfully blocking international speculators from manipulating the New Taiwan Dollar, allowing Taiwan to emerge from the crisis largely unscathed.

Dual-Rate Policy and Steady Stewardship

The core of Perng’s policy lay in maintaining the stability of both interest rates and exchange rates. He advocated for a relatively undervalued NT Dollar to support Taiwan’s export-driven economy, while using steady money supply and discount rate policies to curb inflation. Under his leadership, Taiwan successfully navigated the 2000 Dot-com crash and the 2008 Global Financial Crisis. His exceptional macroeconomic management earned him his first “A-grade” rating from Global Finance magazine in 2000, eventually accumulating a historic total of 14 A-grades, earning him the nickname “14A Governor” and praise as the “guardian angel of Taiwan’s economy.”

Retirement and Historical Legacy

Perng retired in 2018 and became an advisor to the Central Bank. While his exchange rate policy of “preventing appreciation but allowing depreciation” and long-term low-interest-rate environment faced criticism from some academics and importers for potentially inflating housing prices or slowing down industrial upgrades, it is undeniable that during his 20-year stewardship, Taiwan maintained an exceptionally low and stable inflation rate, and its vast foreign reserves provided a powerful shield for the nation’s financial security.

Editor-in-Chief’s Verdict from Taiwan NEXT: Governor Perng Fai-nan is the “Iron Man of Finance” in Taiwan’s economic history. Amid frequent transitions of power and political turbulence in contemporary Taiwan, Governor Perng consistently guarded the central bank’s independence, refusing to bow to political pressure. His dedication to national financial security ensured that Taiwan stood firm through successive global crises. He is the ultimate exemplar of a professional technocrat, and history will forever remember him as the shield builder for this island.