With interest rates expected to go up this week after the U.S. Federal Reserve's policy meeting on June 14, analysts expect Taiwan's Central Bank to convene a board meeting on June 16 to follow suit and hike interest rates from 0.125 to 0.25 percentage points. In response to the forecasts, the Taiex plummeted 350 points upon opening on June 13.
Wu Meng-tao, Research Division VI Director, Taiwan Institute of Economic Research: “The Central Bank will probably increase interest rates by at least 0.25 percentage points.”
After the Central Bank hiked interest rates by 0.25 percentage points in March, experts predicted further hikes were coming. The Central Bank will convene a board meeting on June 16 as it looks to combat surging inflation and narrow the interest rate gap.
Wu Meng-tao, Research Division VI Director, Taiwan Institute of Economic Research: “The U.S. Fed's moves to suppress inflation probably mean an interest rate hike of at least 0.5 percentage points. To keep the interest rate gap from growing larger, (Taiwan's) Central Bank will probably be more hawkish this time around.”
Experts say the U.S. will make the first move during "Central Bank Super Week" with an interest rate hike of 0.5 to 0.75 percentage points. The scale of the Fed's hike will be a benchmark for Taiwan's Central Bank, but experts don't expect a hike of more than 0.25 percentage points.
Wu Meng-tao, Research Division VI Director, Taiwan Institute of Economic Research: “The interest rate of (domestic banks) is under 2 percent right now, so overall it's not having a big impact on consumer prices. The focus is more on mortgages. People don't take out loans to buy everyday things.”
After the Dow's major setback on June 10, the Taiex plummeted 350 points upon opening on the 13th, at one point falling close to 400 points.
Winson Wang, Financial Analyst: “The pressure is coming from foreign investors and electronics and weighted financial stocks. There may be major adjustments today, but we haven't seen a "stop falling" signal.”
Experts say this year's consumer price index will be around 3 percent this year with inflationary pressure remaining high.