On Preventive Rate Hikes, Governor Yang Chin-long Says Inflation Expectations Not Severe but CPI Forecast May Be Revised Up
In response to inflation concerns sparked by May's CPI growth exceeding 2%, Central Bank Governor Yang Chin-long stated in the legislature on June 10 that while the annual CPI forecast might be revised upward due to the prolonged Middle East conflict, there is currently no need for a preventive interest rate hike. He reasoned that there is no imported inflation in Taiwan at present and inflation expectations are not severe. He explained that a preventive hike is only warranted if sustained inflation is foreseeable for the next six to twelve months.
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- 📰 Published: June 10, 2026 at 12:43
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(CNA, by reporter Pan Tze-yu, Taipei, 10th) The Directorate-General of Budget, Accounting and Statistics announced that the Consumer Price Index (CPI) for May saw a growth rate exceeding 2%, sparking public concern about inflation and focusing attention on the necessity of a preventive interest rate hike. Central Bank Governor Yang Chin-long stated that due to the longer-than-expected conflict in the Middle East, the central bank might revise its CPI forecast upward. However, he noted that as of now, Taiwan does not have imported inflation.
Regarding whether a preventive rate hike is necessary, Yang said that the prerequisite for such a move is a general prediction that inflation will continue to rise over the next six months to a year, and that inflation expectations have taken hold. However, current observations suggest that inflation expectations are not severe.
Yang attended the Finance Committee of the Legislative Yuan today, where Taiwan's inflation situation and the central bank's monetary policy direction were under scrutiny.
KMT Legislator Lee Yen-hsiu pointed out that the central bank's decision to raise the interest rate by half a code (0.125 percentage points) in March 2024 surprised the market. Looking back, she asked if he felt the preventive measure was effective. Yang replied, 'From the perspective of the situation at that time, I believe the preventive rate hike was the right move.'
Lee followed up, asking whether it is better for the central bank to take preventive action beforehand or to act afterward, given that rising international energy prices due to the Middle East conflict are already affecting Taiwan.
Yang explained that a preventive rate hike is necessary when it can be predicted that inflation will continue to rise over the next six months to a year, and inflation expectations form and subsequently push inflation up. In such a scenario, a preventive hike is a must. However, if inflation rises and then quickly falls, the policy effect of a preventive hike would not be very good.
Yang further noted that the current wave of inflation is primarily driven by supply-side factors. He views the Taiwan government's supply-side policy response as quite successful, because monetary policy is less effective against supply-driven inflation.
KMT Legislator Yen Kuan-heng questioned whether keeping interest rates unchanged while energy prices are high weakens the function of using the exchange rate to mitigate imported inflation, given that a strong New Taiwan dollar helps combat it.
Yang stated that because the Middle East conflict has lasted longer than expected, the central bank might revise its full-year CPI forecast upward in June. However, he reiterated that, for now, Taiwan does not have a problem with imported inflation, nor is it experiencing heightened inflation expectations. (Editor: Pan Yi-ching) 1150610
Regarding whether a preventive rate hike is necessary, Yang said that the prerequisite for such a move is a general prediction that inflation will continue to rise over the next six months to a year, and that inflation expectations have taken hold. However, current observations suggest that inflation expectations are not severe.
Yang attended the Finance Committee of the Legislative Yuan today, where Taiwan's inflation situation and the central bank's monetary policy direction were under scrutiny.
KMT Legislator Lee Yen-hsiu pointed out that the central bank's decision to raise the interest rate by half a code (0.125 percentage points) in March 2024 surprised the market. Looking back, she asked if he felt the preventive measure was effective. Yang replied, 'From the perspective of the situation at that time, I believe the preventive rate hike was the right move.'
Lee followed up, asking whether it is better for the central bank to take preventive action beforehand or to act afterward, given that rising international energy prices due to the Middle East conflict are already affecting Taiwan.
Yang explained that a preventive rate hike is necessary when it can be predicted that inflation will continue to rise over the next six months to a year, and inflation expectations form and subsequently push inflation up. In such a scenario, a preventive hike is a must. However, if inflation rises and then quickly falls, the policy effect of a preventive hike would not be very good.
Yang further noted that the current wave of inflation is primarily driven by supply-side factors. He views the Taiwan government's supply-side policy response as quite successful, because monetary policy is less effective against supply-driven inflation.
KMT Legislator Yen Kuan-heng questioned whether keeping interest rates unchanged while energy prices are high weakens the function of using the exchange rate to mitigate imported inflation, given that a strong New Taiwan dollar helps combat it.
Yang stated that because the Middle East conflict has lasted longer than expected, the central bank might revise its full-year CPI forecast upward in June. However, he reiterated that, for now, Taiwan does not have a problem with imported inflation, nor is it experiencing heightened inflation expectations. (Editor: Pan Yi-ching) 1150610
FAQ
台灣央行爲何討論預防性升息？
因為主計總處公布的5月消費者物價指數（CPI）漲幅突破2%，加上中東戰事影響，引發了外界對通膨的擔憂。
央行總裁楊金龍對預防性升息的看法是什麼？
楊金龍認為目前沒有預防性升息的必要，因為通膨預期不嚴重，且尚未出現輸入性通膨。他強調，只有在能預見未來半年到一年通膨會持續上升時，才有必要採取此措施。
央行是否會調整對2024年通膨的預測？
是的，楊金龍表示，由於中東戰事比預期要久，央行可能會在6月上修全年的CPI預測值。
楊金龍如何評價2024年3月的升息決策？
他認為，以當時的狀況來看，3月決議升息半碼的預防性措施是「正確的」決定。
當前通膨的主要原因是什麼？
根據楊金龍的說法，這波通膨主要是由供給面因素推動，他認為台灣政府採取的供給面政策相當成功，而貨幣政策對此類通膨效果有限。