© Reuters. A man wearing a face mask to prevent the spread of the coronavirus disease (COVID-19) works at a stall in a market in Taipei, Taiwan, November 26, 2021. REUTERS/Annabelle Chih
TAIPEI (Reuters) – Some board members of Taiwan’s central bank noted “persistent” concerns about higher inflation and said more monetary policy tightening could not be ruled out if inflation continued to be high, minutes from its last board meeting showed on Thursday.
The central bank, at its quarterly board meeting in December, unanimously decided to keep its policy rate at 1.875% as expected, and said it saw the consumer price index, or CPI, falling to below 2% in 2024.
It also said it would not necessarily follow the U.S. Federal Reserve in cutting interest rates in 2024 but that the island’s tightening of monetary policy was near an end as long as inflation was under control.
One board member, who was not identified in the minutes, noted the bank’s forecast that inflation should drop to below 2% in 2024.
“However, if that forecast does not materialise next year, which might be attributable to insufficient monetary tightening, then it would probably call for more aggressive tightening actions,” it cited the board member as saying.
Another board member said even with the slowdown in the rate, “persistent inflation remained a concern”.
“It is also important for monetary policy actions to be taken when necessary.”
A third board member said the bank’s monetary policy decisions in 2024 “would depend on how inflation moves and could tighten further if warranted”.
Taiwan’s inflation rate, which was 2.71% in December, has been much milder than that of economies in Europe and the United States.
The central bank – which has 13 members on its board – holds its next quarterly rate-setting meeting on March 21.