Taiwanese Central bank prioritizes inflation when adjusting monetary policy: bank governor

• The Governor of Taiwan’s central bank, Yang Chin-long, emphasized that the bank’s priority is combating inflation over boosting economic growth.
• During a legislative hearing, Yang stated that the central bank would focus on addressing inflationary pressure before considering interest rate cuts, signaling no imminent rate cuts.
• In September, the central bank maintained its key interest rates for the second consecutive quarter at 1.875%, the highest level in eight years, as part of its efforts to combat rising inflation.
• Yang noted that the central bank’s tightening monetary policy measures could continue for a prolonged period if needed.
• The bank’s forecast for 2023 predicts a consumer price index (CPI) growth of 2.22%, and core CPI growth (excluding food and energy) of 2.44%, both above the bank’s 2% alert level.
• Yang mentioned that as long as international crude oil prices remain high, inflationary pressure in major economies is unlikely to ease soon.
• Regarding potential interest rate cuts in 2023, Yang emphasized that Taiwan’s central bank would remain data-independent and consider the Federal Reserve’s stance on interest rates before making any decisions.
• The central bank has recently lowered Taiwan’s GDP growth forecasts for 2023 due to weakening global demand, with an emphasis on maintaining market order in the currency market amidst a weaker Taiwan dollar.

External Link : https://focustaiwan.tw/business/202310040019