Taiwan will not follow the US in setting its monetary policy, but it would pay attention to global peers’ moves, international raw material price trends and geopolitical risks, central bank Governor Yang Chin-long (楊金龍) told a meeting of the legislature’s Finance Committee yesterday.
“There is no need for Taiwan to follow the US monetary decisions,” as the US Federal Reserve is widely believed to raise interest rates by 50 basis points next month in another of six more rate hikes for this year to curb inflation, Yang said.
US inflation last month hit 8.5 percent, while Taiwan’s rose 3.27 percent, rendering drastic rate hikes unwarranted, he said.
Photo: CNA
Rather, the central bank will approach the matter by taking into consideration policy moves by global peers, inflationary pressures at home, and international fuel and raw material price movements, he said.
In addition, the central bank will seek to support the nation’s economy to meet its duty, he said.
Yang said he stood by the view that Taiwan could achieve a GDP growth of 4 percent this year, although international research bodies have cut their forecast to an average of 3.8 percent after Russia invaded Ukraine in February and crude prices have since shot up.
Consumer prices in Taiwan are likely to ease next quarter, although the landscape is teeming with uncertainties, Yang said.
The central bank will make its quarterly decisions guided by the latest global and domestic economic data, Yang said, while acknowledging that the ongoing weakening of the New Taiwan dollar against the greenback is lending force to inflation.
Consumer prices picked up 0.1 to 0.17 percentage points after the NT dollar recently softened from NT$28 to NT$29 versus the US currency, Yang said, describing the extra inflationary burden as moderate.
A weak NT dollar will not necessarily become a norm, but has much to do with global funds responding to the Fed’s rate hikes and asset adjustments, he said.
“The market will have the final say on the NT dollar’s movements, but it remains the best performer in the past two years, thanks to Taiwan’s robust economy and corporate profitability,” Yang said.
The governor reiterated that the rate hike on March 17 is not aimed at cooling the property market, even though it inevitably sent unfavorable messages.
The central bank would favor selective credit controls to prevent funds from overflowing to the property market, he said.
Semiconductor business between Taiwan and the US is a “win-win” model for both sides given the high level of complementarity, the government said yesterday responding to tariff threats from US President Donald Trump. Home to the world’s largest contract chipmaker, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), Taiwan is a key link in the global technology supply chain for companies such as Apple Inc and Nvidia Corp. Trump said on Monday he plans to impose tariffs on imported chips, pharmaceuticals and steel in an effort to get the producers to make them in the US. “Taiwan and the US semiconductor and other technology industries
SMALL AND EFFICIENT: The Chinese AI app’s initial success has spurred worries in the US that its tech giants’ massive AI spending needs re-evaluation, a market strategist said Chinese artificial intelligence (AI) start-up DeepSeek’s (深度求索) eponymous AI assistant rocketed to the top of Apple Inc’s iPhone download charts, stirring doubts in Silicon Valley about the strength of the US’ technological dominance. The app’s underlying AI model is widely seen as competitive with OpenAI and Meta Platforms Inc’s latest. Its claim that it cost much less to train and develop triggered share moves across Asia’s supply chain. Chinese tech firms linked to DeepSeek, such as Iflytek Co (科大訊飛), surged yesterday, while chipmaking tool makers like Advantest Corp slumped on the potential threat to demand for Nvidia Corp’s AI accelerators. US stock
The US Federal Reserve is expected to announce a pause in rate cuts on Wednesday, as policymakers look to continue tackling inflation under close and vocal scrutiny from US President Donald Trump. The Fed cut its key lending rate by a full percentage point in the final four months of last year and indicated it would move more cautiously going forward amid an uptick in inflation away from its long-term target of 2 percent. “I think they will do nothing, and I think they should do nothing,” Federal Reserve Bank of St Louis former president Jim Bullard said. “I think the
Cryptocurrencies gave a lukewarm reception to US President Donald Trump’s first policy moves on digital assets, notching small gains after he commissioned a report on regulation and a crypto reserve. Bitcoin has been broadly steady since Trump took office on Monday and was trading at about US$105,000 yesterday as some of the euphoria around a hoped-for revolution in cryptocurrency regulation ebbed. Smaller cryptocurrency ether has likewise had a fairly steady week, although was up 5 percent in the Asia day to US$3,420. Bitcoin had been one of the most spectacular “Trump trades” in financial markets, gaining 50 percent to break above US$100,000 and
RSS