Governor of Taiwan’s Central Bank Perng Fai-nan visited the legislature on Wednesday to answer legislators’ questions about the direction of the economy.
A day before a meeting of the Central Bank’s board of directors, legislators asked questions about monetary policy and policies used to control the housing market.
Perng said important economies around the world have adopted different monetary policies. He said the US and UK have been tightening monetary policy while Japan, China, and the Eurozone have pursued a policy of monetary easing. Perng said US monetary policy will have the greatest impact on Taiwan, as changes in the yield from 10-year Taiwanese bonds have mirrored changes in the yield from 10-year US bonds.
Perng said the Central Bank predicts the US will decide to stop purchasing debt at the meeting of the Federal Open Market Committee at the end of October. Perng also predicted that the US may raise its interest rate in June or July next year.
When asked if Taiwan would also raise interest rates, Perng said the Central Bank would decide based on the price of goods and economic conditions both domestically and internationally.
Meanwhile, asked about whether the government will come up with a new wave of policies to control the housing market, Perng said that current policies have proven adequate to keep the market under control.