Board Members on Middle East Conflict: Central Bank Must Respond Preemptively if Inflation Expectations Rise
Amid rising international energy prices due to the Middle East conflict, Taiwan's central bank board members expressed concerns about a resurgence of inflation. Several directors are closely monitoring inflation expectations and warned that the central bank must respond preemptively if these expectations escalate.
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- 📰 Published: April 30, 2026 at 18:50
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Key News on US-Iran War
Central News Agency
(Central News Agency reporter Pan Tzu-yu, Taipei, 30th) The Middle East conflict has pushed up international energy prices, raising market concerns about a resurgence of inflation. The Central Bank today announced the summary of its first-quarter board meeting minutes, showing that several board members are concerned about the trend of inflation expectations and warned that if expectations rise, the central bank must respond preemptively.
The US-Iran war broke out at the end of February, and the conflict has not yet ended, leading to a sharp rise in international energy prices and bringing inflation concerns. The central bank's main responsibility includes maintaining price stability, and its views on the impact of the Middle East conflict are closely watched.
The Central Bank's first-quarter board meeting decided to keep interest rates "frozen for 8 consecutive times" and slightly relaxed housing market controls. The summary of the board meeting minutes was released today. Several board members stated that the Middle East conflict caused international oil prices to rise, but under the government's strengthened energy price stabilization mechanism, domestic prices remain stable, and economic growth is robust, supporting the decision to keep policy interest rates unchanged.
However, several board members pointed out that the development of public inflation expectations should be closely monitored. One board member believed that rising international oil prices directly push up domestic energy prices, and if this further leads to inflation expectations, it will be difficult for prices of some highly sticky goods to come down once manufacturers take the opportunity to raise them.
Another board member pointed out that if public inflation expectations continue to rise, it may lead to further price increases, suppress demand, and thus affect economic growth. Eliminating public expectations of rising inflation is crucial.
One board member further pointed out that according to international institutions' research on the transmission mechanism of rising international oil prices to inflation, the impact of oil prices on prices can be divided into two stages: in the first stage, when a country's energy prices rise, the central bank does not need to react, because monetary policy has very limited effect on this type of cost-push inflation; the second stage requires observing public inflation expectations, and if there is any loosening, the central bank must respond preemptively.
This board member stated that currently, under the government's energy price stabilization mechanism, Taiwan has not yet entered the second stage, and therefore supports keeping monetary policy unchanged.
One board member believed that the future trend of international oil prices is difficult to predict, and if oil prices continue to soar until the end of April, the central bank may revise upward its forecast for this year's Consumer Price Index (CPI) annual growth rate. Another board member also pointed out that since February this year, the leading indicator of core prices has risen, predicting that the annual growth rate of core prices will continue to climb, which is worth noting.
A central bank board member reminded that there are differences in the consumption structure of households with different incomes, and the CPI annual growth rate of the lowest-income households is often higher than the overall CPI annual growth rate. Close attention should be paid to the greater impact of inflation on low-income households and the worsening of income distribution, which not only affects the overall economy but may also affect financial stability. (Editors: Pan Yi-ching, Yang Kai-xiang) 1150430
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Central News Agency
(Central News Agency reporter Pan Tzu-yu, Taipei, 30th) The Middle East conflict has pushed up international energy prices, raising market concerns about a resurgence of inflation. The Central Bank today announced the summary of its first-quarter board meeting minutes, showing that several board members are concerned about the trend of inflation expectations and warned that if expectations rise, the central bank must respond preemptively.
The US-Iran war broke out at the end of February, and the conflict has not yet ended, leading to a sharp rise in international energy prices and bringing inflation concerns. The central bank's main responsibility includes maintaining price stability, and its views on the impact of the Middle East conflict are closely watched.
The Central Bank's first-quarter board meeting decided to keep interest rates "frozen for 8 consecutive times" and slightly relaxed housing market controls. The summary of the board meeting minutes was released today. Several board members stated that the Middle East conflict caused international oil prices to rise, but under the government's strengthened energy price stabilization mechanism, domestic prices remain stable, and economic growth is robust, supporting the decision to keep policy interest rates unchanged.
However, several board members pointed out that the development of public inflation expectations should be closely monitored. One board member believed that rising international oil prices directly push up domestic energy prices, and if this further leads to inflation expectations, it will be difficult for prices of some highly sticky goods to come down once manufacturers take the opportunity to raise them.
Another board member pointed out that if public inflation expectations continue to rise, it may lead to further price increases, suppress demand, and thus affect economic growth. Eliminating public expectations of rising inflation is crucial.
One board member further pointed out that according to international institutions' research on the transmission mechanism of rising international oil prices to inflation, the impact of oil prices on prices can be divided into two stages: in the first stage, when a country's energy prices rise, the central bank does not need to react, because monetary policy has very limited effect on this type of cost-push inflation; the second stage requires observing public inflation expectations, and if there is any loosening, the central bank must respond preemptively.
This board member stated that currently, under the government's energy price stabilization mechanism, Taiwan has not yet entered the second stage, and therefore supports keeping monetary policy unchanged.
One board member believed that the future trend of international oil prices is difficult to predict, and if oil prices continue to soar until the end of April, the central bank may revise upward its forecast for this year's Consumer Price Index (CPI) annual growth rate. Another board member also pointed out that since February this year, the leading indicator of core prices has risen, predicting that the annual growth rate of core prices will continue to climb, which is worth noting.
A central bank board member reminded that there are differences in the consumption structure of households with different incomes, and the CPI annual growth rate of the lowest-income households is often higher than the overall CPI annual growth rate. Close attention should be paid to the greater impact of inflation on low-income households and the worsening of income distribution, which not only affects the overall economy but may also affect financial stability. (Editors: Pan Yi-ching, Yang Kai-xiang) 1150430
Choose to stand with facts, every sponsorship you make is a force to protect press freedom.
Download the Central News Agency "First-hand News" APP to stay updated with the latest news.
The text, images, and videos on this website may not be reproduced, publicly broadcast, or publicly transmitted and used without authorization.