TAIPEI (Taiwan News) – The Central Bank of Taiwan held its third quarter meeting of the board of directors and supervisors on Thursday (Sept. 22). Following the meeting, the bank announced it will maintain a policy of “dovish tightening” on interest rates.
The Central Bank confirmed it will raise interest rates for the third consecutive quarter in a row, this time by 0.125 percentage points, effective from Oct. 1. The deposit reserve ratio for banks will also be increased by 0.25 percent for New Taiwan Dollars, which will bring the rate to 4.55 percent starting next month.
Further, the anticipated growth rate of Taiwan’s economy for 2022 was lowered slightly to an estimated 3.51 percent. This represents a decrease of 0.24 percentage points from the 3.75 rate announced in June.
The Central Bank also estimates that the consumer price index (CPI) for Taiwan will likely have a cumulative increase of 2.95 percent for the year.
The announcement from the Central Bank of Taiwan came shortly after the U.S. Federal Reserve declared that it would raise the interest rate benchmark by 0.75 percent, with an additional quarter percent increase expected before the end of the 2022 calendar year.
However, Central Bank Governor Yang Chin-long (楊金龍) has emphasized in recent statements that the economic conditions for the U.S. and Taiwan are very different, and that the Central Bank of Taiwan does not base its monetary policy solely on the decisions of the U.S. Federal Reserve, reports UDN.