Taiwan raises policy interest rate unexpectedly

By Gokhan Ergocun

ISTANBUL (AA) – Taiwan's central bank unexpectedly raised interest rates by 125 basis points to 2%, the highest level since 2008.

The bank decided to hike interest rates to help sustain price stability and foster sound economic and financial development, it said on Thursday.

It said: "The domestic inflation rate was expected to slowly come down quarter by quarter this year.

"However, given that inflation has stayed at a relatively higher level since 2021 and that a proposed electricity rate hike might be implemented in April this year, inflation expectations might shift upwards."

The bank previously raised the rate from 1.125% to 1.875% gradually between the first quarter of 2021 and the first quarter of 2023.

After keeping the rate constant during the last three meetings, the bank raised the rate to 2% on Thursday.