The central bank’s next quarterly policymaking meeting is to be held on Thursday next week, the first to be presided over by new bank Governor Yang Chin-long (楊金龍), who took office last month.
In a written report to the Legislative Yuan’s Finance Committee ahead of a hearing scheduled for today, Yang said the nation’s interest rates are still higher than many other economies, but its real interest rates are “appropriate.”
That comment led analysts and investors to conclude the bank would leave key interest rates next week, despite a rate hike cycle in the US.
Consumer price growth in Taiwan has remained stable, with the consumer price index (CPI) standing at 1.54 percent for the first two months of the year, within the government’s 2 percent target, Yang said in the report.
Although last month’s CPI rose 2.19 percent from a year earlier, the highest since January last year, the spike was caused by seasonal factors, such as the Lunar New Year holiday occuring last month, boosting expenses such as travel costs, he said.
Last year’s hike in tobacco and alcohol prices would continue to affect consumer prices, while the 3 percent wage increase for civil servants, teachers and military personnel that took effect on Jan. 1 is expected to boost prices, on the whole consumer price growth is expected to stay stable, Yang said.
The CPI is expected to increase by 1.21 percent this year, the Directorate-General of Budget, Accounting and Statistics said earlier this month.
The release of Yang’s report has raised hopes that no changes will be made to the bank’s monetary policy next week, analysts said.
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