Taiwan Central Bank monitors inflation as oil prices rise due to Middle East tensions. The bank believes the price increase will be temporary. Officials closely watch inflation risks amid ongoing global uncertainty. The bank identified four main inflation drivers. These include global commodity prices, domestic service trends, geopolitical instability, and weather changes. They stressed that monetary policy will adjust to maintain price stability.
Oil prices surged earlier this month after military clashes between Israel and Iran. Although OPEC+ output has helped keep prices lower this year, recent tensions sparked supply chain worries. These concerns have also affected investment sentiment. However, the Taiwan Central Bank sees the current oil price rise as short-lived. It does not expect a major impact on consumer prices. The bank remains cautious but optimistic about inflation.
On exchange rates, Taiwan’s economy has shown resilience amid Taiwan dollar appreciation. Exporters may face some challenges, but importers benefit from lower costs. This dynamic helps balance the overall economic impact. Over time, currency gains and losses tend to even out. The bank stated that fluctuations in the Taiwan dollar should not cause significant problems for most industries. The currency movements will likely balance in the long run. To support businesses facing external risks, the bank urged ongoing government assistance. Small and medium-sized enterprises and traditional industries with limited hedging tools need particular attention.
The bank emphasized stabilizing the foreign exchange market as essential. Furthermore, promoting higher-value production will help improve Taiwan’s global competitiveness. The Central Bank highlighted this approach as key to long-term economic strength. It encourages efforts that enhance resilience against external shocks. In conclusion, the Taiwan Central Bank monitors inflation closely amid the oil shock. Officials remain ready to adjust policies to protect the economy. The bank continues to prioritize price stability and support for vulnerable sectors.
