Taiwan’s central bank governor said Thursday that inflation would be the key factor in deciding whether to cut interest rates next week.
Responding to questions from parliamentarians, central bank governor Yang Chin-long said the island’s interest rates were at their highest level in 15 and a half years.
He acknowledged that there is growing expectation that the US Federal Reserve will cut rates in September, but he would not make a firm commitment that Taiwan’s central bank would follow suit. of the Fed.
“Cutting interest rates depends entirely on the state of inflation,” Yang said. “US rates are high, but our situation is different.
Taiwan’s consumer price index rose 1.95% in April from a year earlier, lower than analysts’ forecasts, and the government said inflation was easing slightly.
At its quarterly board meeting in March, the central bank surprised markets by raising its key rate from 1.875% to 2%, wary of persistent inflationary pressures and anticipating a rise in electricity prices.
The central bank will hold its next rate-setting meeting on June 13.
Taiwan’s statistics bureau said last week that the trade-dependent economy is expected to grow at a faster rate in 2024 than previously forecast, due to strong demand for artificial intelligence (AI) applications in China. abroad and solid consumption within the country. (Reporting by Faith Hung and Liang-sa Loh; Editing by Stephen Coates)
