Taiwan Central Bank Signals End to Property Credit Tightening, Cautious on Easing

Taiwan's central bank governor, Yang Chin-long, has signaled a pause in tightening credit controls on the property market, stating that the current measures, which have reached their seventh iteration, will not be further intensified. This announcement comes ahead of the central bank's upcoming board meeting.

However, Yang remained non-committal on whether the existing property market restrictions would be relaxed. His comments suggest that while no further tightening is planned, the possibility of easing measures remains uncertain, leaving market participants awaiting further guidance.

On the issue of inflation, Yang addressed concerns about potential interest rate hikes. He explained that preventive rate increases are a viable option if inflation is projected to rise consistently over the next six to twelve months, potentially fueling inflation expectations. Conversely, if inflation is seen as a temporary surge likely to recede quickly, such proactive measures might not be necessary.

Despite a recent increase in Taiwan's consumer price index, Yang emphasized that inflation remains relatively moderate compared to major economies. He noted that government measures, such as freezing utility prices, have been effective in stabilizing costs. While the annual CPI forecast is nearing the 2% alert level, it is still considered within a controllable range. The central bank will continue to monitor global oil prices, geopolitical risks, and domestic inflation expectations before deciding on future monetary policy.