Taiwan's January consumer price index rose 3.04% year-on-year, exceeding market expectations for a 2.69% rise. With the island's export-driven economy now slowing sharply, the central bank will have to consider at its next scheduled quarterly meeting in March whether to stand pat, or even to start cutting rates. The Taiwan dollar lost almost 10% of its value against the greenback last year, but so far this year has strengthened around 1%. (Reporting by Liang-sa Loh and Faith Hung; Writing by Ben Blanchard; Editing by Raissa Kasolowsky)
(Adds details, background)
TAIPEI, Feb 24 (Reuters) - Taiwan's central bank said on
Friday that last year it sold a net $13 billion to intervene in
the foreign exchange market to try and prop up the Taiwan
dollar, compared with buying a net $9.12 billion for all of
2021.
It is necessary to maintain the relative stability of the
Taiwan dollar exchange rate, the central bank said in a report
to lawmakers ahead of its governor taking questions in
parliament on Wednesday.
The central bank, at its quarterly meeting in December,
raised its policy rate by 12.5 basis points (bps)
to 1.75% and signalled an end to rate hikes in 2023 given
inflation is coming under control.
The central bank reiterated that inflation this year would
fall to about 2%, in line with a forecast made Bank Governor
Yang Chin-long forecast at the December meeting.
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