The Taiwanese central bank is scheduled to hold its quarterly rate-setting meeting today. The central bank has frozen Taiwan’s interest
The Taiwanese central bank is scheduled to hold its quarterly rate-setting meeting today. The central bank has frozen Taiwan’s interest rate since March 2020 amid feared COVID-19 economic pressures. However, recent comments from Governor Yang Chin-long illustrate that the bank will soon consider a move towards “tightening” monetary policy by raising interest rates.
The suspension of rate changes has allowed the Taiwanese economy to remain strong throughout the COVID-19 pandemic, with the nation observing 4.03% GDP growth in early 2022. Partly owing to a surge in at-home office technology, the Taiwanese tech industry saw unprecedented demand for chips and semiconductors in computers, tablets and phones. Taiwan’s macroeconomy remains strong despite their largest export markets—China and the US—lessening tech demand. Economic forces such as the 5G rollout, high-end computing goods and electric vehicles continue to bolster both domestic and international markets.
Expect the Taiwanese interest rate to increase at the end of March following post-COVID economic successes and domestic tech corporate profits. While the macroeconomic environment is currently strong, the Ukraine-Russia conflict possesses a medium term risk to supply chain integrity and Taiwan’s trans-national affiliated companies.
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