Taiwan: central bank in little rush to raise rates

Taiwan’s central bank (CBC) looks all but certain to leave its main policy rate unchanged at its current all-time low of 1.125% at its meeting on Thursday. With the economy performing well, there is a plausible argument that the central bank will start raising interest rates soon. However, given concerns about deflation and worries over the recent strength of the currency, we think policymakers will be in little rush to start tightening monetary policy.