Taiwan wary about raising rates now, but set to follow tightening trend next yr

© Reuters. A Taiwan dollar note is seen in this illustration photo May 31, 2017. REUTERS/Thomas White/Illustration TAIPEI (Reuters) -Taiwan's central bank is concerned that any interest rate hike now could lift the local currency, but will "definitely" follow the global tightening trend for next year, central bank governor Yang Chin-long said on Monday. The benchmark rate is currently at 1.125%, the lowest on record, where it has sat since March of last year. However minutes of the last board meeting in September showed that some members were worried about inflation and had recommended considering a rate rise. Taking lawmaker questions in parliament, Yang expressed concern that any rate rise now would push up the Taiwan dollar. "This is an area of worry for us," he said. "So we need to watch the rate adjustment situation in other countries." However, the global trend for next year will to tighten policy, a direction Taiwan will "definitely" follow, Yang added. The Taiwan dollar's strength has vexed the government, not only because it makes exports crucial for economic growth more expensive but also as it raises the risk of being labelled a currency manipulator by the United States. Taiwan was last formally labelled a currency manipulator by the United States in December 1992. It was put back on the monitoring list in 2020. The central bank holds its next quarterly rate-setting meeting in mid-December. Analysts say any rate rise would likely not come until the middle of next year, and only after the U.S. Federal Reserve has raised rates. Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Taiwan wary about raising rates now, but set to follow tightening trend next yr
Taiwan wary about raising rates now, but set to follow tightening trend next yr© Reuters. A Taiwan dollar note is seen in this illustration photo May 31, 2017. REUTERS/Thomas White/Illustration

TAIPEI (Reuters) -Taiwan's central bank is concerned that any interest rate hike now could lift the local currency, but will "definitely" follow the global tightening trend for next year, central bank governor Yang Chin-long said on Monday.

The benchmark rate is currently at 1.125%, the lowest on record, where it has sat since March of last year.

However minutes of the last board meeting in September showed that some members were worried about inflation and had recommended considering a rate rise.

Taking lawmaker questions in parliament, Yang expressed concern that any rate rise now would push up the Taiwan dollar.

"This is an area of worry for us," he said. "So we need to watch the rate adjustment situation in other countries."

However, the global trend for next year will to tighten policy, a direction Taiwan will "definitely" follow, Yang added.

The Taiwan dollar's strength has vexed the government, not only because it makes exports crucial for economic growth more expensive but also as it raises the risk of being labelled a currency manipulator by the United States.

Taiwan was last formally labelled a currency manipulator by the United States in December 1992. It was put back on the monitoring list in 2020.

The central bank holds its next quarterly rate-setting meeting in mid-December.

Analysts say any rate rise would likely not come until the middle of next year, and only after the U.S. Federal Reserve has raised rates.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.