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Governor of Central Bank indicates move toward tightened monetary policy

Yang stresses Taiwan will follow interest rate adjustments by major economies

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Yang Chin-long.

Yang Chin-long. (CNA photo)

TAIPEI (Taiwan News) — Central Bank Governor Yang Chin-long (楊金龍) said on Monday (Nov. 22) that the bank will move to tighten its monetary policy in step with trends in the global economy.

The announcement prompted speculation the Central Bank will raise interest rates in 2022, according to a CNA report. Yang on Monday delivered a special report to the Legislative Yuan's Finance Committee, where Kuomintang legislators voiced concerns that Taiwan could misjudge the current inflationary trend as temporary like the U.S. Federal Reserve did.

“Taiwan’s situation is not the same as the U.S.” Yang said. Yang said Taiwan’s price index is well under control and that there is no risk of misjudging the trends.

He reiterated three conditions that would have to be met for Taiwan to adjust its interest rates: the current inflation rate (and likely future rate), the interest rate hikes among major global economies, and overall relief efforts and recovery of the economy.

Yang said Taiwan’s decision to raise interest rates must take similar hikes in major countries into account. If Taiwan jumps ahead of other countries and raises rates first, it may cause the currency to appreciate, which would have a negative impact on the real estate sector.


Updated : 2021-11-30 12:17 GMT+08:00