Taiwan central to continue tightening policies

Taiwan central bank will continue its tightening policy to curb inflation, Reuters reported on Tuesday.

Taiwan central bank recently raised its benchmark rate unexpectedly to 2 per cent from 1.875 per cent, aiming to curb inflation amid rising expectations.

The decision follows inflationary pressures and an imminent 11 per cent increase in electricity prices, particularly affecting industrial users.

Taiwan central bank plans to assess the impact of these price hikes on inflation and will adjust monetary policy moderately and gradually. Despite the tightening, Taiwan’s inflation remains comparatively mild compared to other major economies.

Moreover, the central bank forecasts a 2.16 per cent increase in the consumer price index (CPI) and a 2.03 per cent rise in core CPI due to the electricity price hikes, with inflation expected to ease gradually throughout the year.