TAIPEI — Taiwan’s central bank governor said on Thursday that inflation is controllable and price rises on the island are stable compared with other countries.
February’s consumer price index (CPI) rose an on-year 2.36%, below market expectations for a 2.7% increase but rising above the central bank’s 2% target for the seventh month in a row.
However, that is well under other major economies. February’s CPI in the United States is expected to show a year-on-year jump of 7.9%.
Taiwan central bank governor Yang Chin-long, taking lawmaker questions in parliament, said prices this year would be affected by both the COVID-19 pandemic and Russia’s invasion of Ukraine.
But the situation for Taiwan is “controllable” and prices stable compared to other countries, and under the 3.5% inflation Taiwan saw in 2008, he added.
“Two percent is ok,” Yang said.
Yang has said previously that the inflation rate will be one of the criteria used to judge whether interest rates should be raised.
Yang last week reiterated that monetary policy will move in the direction of tightening this year, ahead of a quarterly rate-setting meeting next Thursday.
The central bank has left the benchmark discount rate unchanged at 1.125% at its last seven quarterly meetings. It last cut the rate in March of 2020. (Reporting by Liang-sa Loh and Ben Blanchard; Editing by Sam Holmes)