Taiwan’s central bank unexpectedly raised its key interest rate on Thursday, with Governor Yang Chin-long taking a cautious stance on inflation in his first policy decision since renewing his term in office.
(Bloomberg) — Taiwan’s central bank unexpectedly raised its key interest rate on Thursday, with Governor Yang Chin-long taking a cautious stance on inflation in his first policy decision since renewing his term in office.
The benchmark rate was increased by 12.5 basis points to 1.875%, the central bank said in a statement. Of the 24 economists surveyed by Bloomberg, 19 had expected the rate to stay unchanged at 1.75%.
The central bank has hiked rates at five of its last policy meetings now as it contends with an inflation rate that remains uncomfortably high and a Federal Reserve that continues to tighten monetary policy — most recently with a 25 basis-point hike on Wednesday.
Most analysts had expected Taiwan to stay on hold after data showed the economy contracted in the fourth quarter and a global banking crisis triggered financial market turmoil.
Rising US interest rates have prompted central banks in smaller economies like Taiwan to push up their own rates to help stem currency losses.
–With assistance from Cynthia Li and Argin Chang.
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