Taiwan central financial institution to make ‘acceptable’ use of financial coverage

TAIPEI: Taiwan’s central financial institution will make “acceptable” and well timed use of financial coverage to attain worth stability and assist financial progress, it says.

In a shock transfer final month, the central financial institution raised its benchmark rate of interest and by a a lot greater margin than some anticipated.

It cited issues about inflation which have been pushed by provide chain disruptions from the battle in Ukraine.

The financial institution, in a report back to parliament, mentioned it could take note of modifications in world uncooked materials costs, the Covid-19 state of affairs at house, geopolitical dangers and the route of financial coverage in main economies.

It could “make acceptable use of financial coverage in a well timed method” to stabilize costs and assist financial progress.

Nevertheless, it gave no particulars on the timing of any coverage modifications.

Governor Yang Chin-long, who will take lawmaker questions quickly, mentioned on the final month financial coverage assembly it could proceed to maneuver within the route of tightening, however declined to say whether or not the speed rise could be the beginning of an extended hike cycle.

Taiwan’s March client worth index rose an on-year 3.27%.

This was a greater than nine-year excessive and the eighth month in a row it had elevated past the central financial institution’s 2% warning line, pushed by rising world vitality prices because of the Ukraine battle.

Nevertheless, the financial institution’s report famous that in comparison with Europe and the US, Taiwan’s inflation remained “gentle”.

The financial institution in March additionally nudged up its 2022 estimate for gross home product progress to 4.05% from 4.03% seen in December, saying export momentum remained robust.

Its report back to parliament repeated that the financial institution noticed progress this yr exceeding 4%.

Taiwan’s trade-dependent financial system has seen encouraging export numbers to this point, which jumped 23.5% year-on-year within the first quarter.

Taiwan is a significant semiconductor producer.

The worldwide scarcity of the part has saved Taiwanese chip companies’ order books full, pumping up exports. — Reuters


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