TAIPEI (Reuters) – Taiwan’s central bank said on Friday that it will take “timely” steps to ensure financial stability against a backdrop of uncertainty about the pace of monetary policy adjustments globally, geopolitical and climate change risks.
In a financial stability report, the central bank pointed to uncertainties like downside risk for the economy in China, Taiwan’s largest trading partner, fragmentation of the global economy and supply chain restructuring, which may have an adverse impact on global economic development and financial stability.
“The Bank will pay close attention to the possible impact of relevant developments on our country’s economy and finance (systems), and take measures in a timely manner to promote domestic financial stability,” it said, without giving details.
At home, Taiwan’s economy this year is expected to pick up, with inflation slowing, it added.Taiwan’s statistics office on Thursday said the trade-reliant economy was expected to grow at a faster pace in 2024 than previously forecast, owing to high demand for artificial intelligence (AI) applications abroad and solid consumption at home.
The central bank, at its quarterly board meeting in March, surprised markets by raising its policy rate to 2% from 1.875%, wary of continued inflationary pressures and ahead of a rise in electricity prices.
The central bank holds its next rate-setting meeting on June 13.
(Reporting by Ben Blanchard and Liang-sa Loh; Editing by Sharon Singleton)
