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Taiwan business leader speaks out against June interest rate hike

Rate increase will join inflation and COVID in worsening economic climate

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A prominent real estate developer and business leader speaks out against a June interest rate hike. 

A prominent real estate developer and business leader speaks out against a June interest rate hike.  (CNA photo)

TAIPEI (Taiwan News) — A business leader and real estate developer on Wednesday (June 1) spoke out against the possibility of an interest rate hike in June, saying stabilizing the economy should be the priority.

A hike and a new round of selective credit controls amounted to asking banks to “close an umbrella when it starts raining,” said Lai Cheng-i (賴正鎰), the chairman of the General Chamber of Commerce and of prominent developer Shining Building Business Co.

The government should first stabilize the economy, as introducing rate rises at this time would reveal a failure to discern what was important and what needed priority treatment, the businessman said.

Price rises and the continued COVID-19 pandemic were damaging public confidence in the economy and wreaking havoc in sectors including restaurants, travel, and tourism, according to Lai. In addition, the government was lowering its economic growth forecasts for 2022 to below the psychological level of 4%, UDN reported.

Under those circumstances, Lai opposed raising interest rates, because such a decision would cause consumer confidence to decline even faster and strengthen the negative impact of inflation and the pandemic on the public mood, he said.