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Economic conditions

Taiwan's Central Bank Expected to Adjust Interest Rates in Near Term

Strategic Insights

— 1 min read

Taiwan's Central Bank, the Central Bank of China (CBC), is likely to adjust interest rates in the near term, as the United States has already done so three times since late June. The Taiwan Institute of Economic Research (TIER) predicts that the CBC will gradually increase its interest rates by the end of this year to reduce the gap with the United States and to cope with inflationary pressure due to soaring oil prices. The CBC is facing stronger pressure to revise its monetary policy, as oil and liquefied natural gas prices have been adjusted upward several times in the domestic market, and electricity rates and water fees are expected to increase at the beginning of next year.

Key Takeaways:

  • The Taiwan Institute of Economic Research (TIER) predicts that the Central Bank of China (CBC) will gradually increase its interest rates by the end of this year to reduce the gap with the United States.
  • The CBC is facing stronger pressure to revise its monetary policy due to rising oil and liquefied natural gas prices in the domestic market.
  • The Council for Economic Planning and Development (CEPD) Chairman, Hu Sheng-cheng, expressed confidence that the CBC will make the best decision in its upcoming board meeting, but declined to comment on potential interest rate hikes.
  • The TIER head, Wu Rong-i, forecast that the CBC will allow for a moderate gain for the new Taiwan dollar at an appropriate time to tackle pressure from the United States and Europe.
  • The domestic economy is expected to grow by 6% this year, while the inflation rate is expected to remain below 2%.
  • Speculation is high in the domestic market that the CBC will raise its key interest rates by a quarter percentage point in its upcoming meeting.

Statistics:

  • The Central Bank of China (CBC) is expected to gradually increase its interest rates by the end of this year.
  • Oil and liquefied natural gas prices have been adjusted upward several times in the domestic market.
  • The domestic economy is expected to grow by 6% this year.
  • The inflation rate is expected to remain below 2%.
  • The Central Bank of China (CBC) has raised interest rates once since late June, following the United States' three rate hikes.

Sources:

  • Taiwan Institute of Economic Research (TIER)
  • Central News Agency (CNA)
  • Council for Economic Planning and Development (CEPD)

(Taipei, Sept 28 Asia Pulse - Taiwan's central bank is likely to adjust interest rates in the near term...

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