Taiwan defies dovish shift among Asia’s central banks

The common theme across the three central bank meetings in Asia this week was that inflation concerns are fading, partly due to a rebound in currencies, and policymakers appear a bit more concerned about the growth outlook. One exception was Taiwan’s central bank, which sent a hawkish message, albeit not at a scheduled interest rate meeting. We expect most central banks in the region to loosen policy over the coming year, and by more than most expect. But we think the risk in Taiwan is skewed towards further monetary tightening.