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Taipei: Taiwan’s central bank governor said on Thursday that inflation will be a key factor in deciding whether to cut interest rates next week.
Central Bank Governor Yang Jinlong said in response to a question from a member of parliament in Congress that Taiwan’s interest rates have reached their highest level in 15 and a half years.
He acknowledged that expectations were growing that the Federal Reserve would cut interest rates in September, but he was reluctant to firmly commit that Taiwan’s central bank would follow the Fed’s lead.
“Whether we cut interest rates depends entirely on the inflation situation,” Yang said. “U.S. interest rates are hovering high, but our situation is different.”
Taiwan’s consumer price index rose 1.95% in April from a year earlier, below analysts’ forecasts, and the government said inflation was easing modestly.
The Reserve Bank of India unexpectedly raised its policy rate to 2% from 1.875% at its quarterly meeting in March, citing concerns about persistent inflationary pressures and an impending increase 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-reliant economy is expected to grow faster in 2024 than previously forecast, thanks to booming foreign demand for artificial BroadCast Unitedligence (AI) applications and strong domestic consumption.
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