On Wednesday, Taiwan central bank announced its intention to review both domestic and foreign economic and financial conditions, aiming to implement suitable monetary policies to foster price stability and support economic growth in the upcoming year.
During its quarterly board meeting in September, the central bank unanimously decided to maintain its policy rate at 1.875%. However, on Wednesday, it highlighted the continuation of tight monetary policy, expressing vigilance toward inflation while revising downward its growth forecast for the export-oriented economy in 2023.
The Taiwan central bank conveyed in a report to parliament its strategy for the following year, emphasizing its intent to closely monitor domestic and international economic and financial conditions. It plans to employ various monetary policy tools to achieve price stability and facilitate economic growth. This report preceded Governor Yang Chin-long’s scheduled session to answer lawmaker inquiries on Thursday.
Although Taiwan’s economy displayed faster-than-expected growth in the third quarter, mainly due to domestic consumption, the exports remained sluggish because of reduced global demand for the island’s high-tech products. The government foresees a modest full-year growth of 1.61% in 2023, marking the slowest expansion in eight years.
The central bank, in its parliament report, also expressed its commitment to enhance the management framework for the inflow and outflow of foreign capital. Additionally, it intends to guide the currency market to reinforce financial stability.
Furthermore, in its semi-annual currency report released by the U.S. Treasury on Tuesday, Taiwan remained on the foreign exchange “monitoring list.” The Taiwan dollar has experienced a depreciation of about 4.6% against the U.S. dollar since the beginning of this year.