The FOMC meeting of the US Federal Reserve will announce the interest rate decision in the early morning of September 22, Taipei time, and the third-quarter board of directors and supervisors meeting of the Central Bank of Taiwan will also appear in the afternoon of the same day. The momentum of my country’s economic growth will slow down in 2019, while the domestic inflation rate will slow down in the second half of the year, and it is expected to fall below 2% next year. It is emphasized that the monetary policy considerations of Taiwan and the United States are different, or it may imply that my country’s substantial interest rate hike pressure is relatively high. ease.
The central bank raised interest rates by 1 yard in the first quarter, and changed to half a yard of interest rate hikes in the second quarter.New Taiwan DollarThe demand and term deposit reserve ratios were each 0.25 percentage points, which was the first time since the 2008 financial tsunami.
However, the Fed continues to show a hawkish attitude. The market expects that the probability of the Fed raising interest rates by 3 yards again after the September meeting is over 80%. Therefore, all circles are paying attention to what else my country’s central bank can do in the third quarter.
Yang Jinlong recently attended the Association for the Advancement of Industry and Commerce and stated that due to the tightening of monetary policies by major central banks, the global economic growth has slowed down, and the demand for consumer electronics products has cooled. The momentum of my country’s economic growth will also slow down in the past two years.
On the other hand, the central bank has always emphasized that price stabilization is one of its important responsibilities. Yang Jinlong also has a new interpretation of the domestic inflation pressure, believing that the bottleneck of the global supply chain has gradually eased, coupled with the slowdown in the price increase of raw materials such as international crude oil, and the The domestic inflation rate is expected to slow down in half a year, and it is expected to drop below 2% next year.
It can be seen from the above remarks that my country’s economic growth may slow down this year and next, but at the same time, the price surge will also ease. For the central bank, a substantial interest rate hike is relatively less urgent.
Regarding the interest rate gap between Taiwan and the United States, Yang Jinlong explained that the economic structures and financial systems of the two countries are very different, and the monetary policy considerations are also different. He once again suggested that it is not the United States that raises interest rates a few yards, and my country must follow up.
However, it is worth noting that at the meeting of the board of directors and supervisors a few days ago, some directors mentioned that the widening of the interest rate gap between Taiwan and the United States may increase.New Taiwan DollarDevaluation pressure, worry that companies or individuals chasing interest rate spreads may lead to remittances, therefore, when the United States raises interest rates sharply, the central bank’s rate of interest rate hike is more appropriate.
At the same time, some directors also mentioned that my country’s inflation pressure is much higher than the actual data shows.
On the whole, Yang Jinlong’s latest remarks did not reveal an obvious hawkish attitude. After all, the central bank will raise interest rates by 1 yard again or maintain half of the yardstick in the second quarter, together with other measures, which have attracted attention from all walks of life. It can be expected that , If the United States continues to raise interest rates sharply, the views of the directors of the central bank’s supervisory meeting will continue to be divided.