Central Bank to Hold Board Meeting on June 18; Governor Says Housing Controls Stop Here

The Central Bank will hold a board meeting on June 18. The market is watching interest rate decisions and housing market control动向, but Central Bank Governor Yang Chin-long gave an early indication of his stance today, saying "selective credit controls stop here," meaning the central bank has no plans to tighten credit controls at this stage.

Governor Yang Chin-long attended the Legislative Yuan's Finance Committee today, where lawmakers inquired about the central bank's views on inflation, the economic situation, and the board meeting's decisions.

Lawmakers were concerned about whether interest rates might be raised given rising inflation pressure in Taiwan and a hot stock market. Yang said the central bank is continuously monitoring the latest data and will discuss interest rates and selective credit controls at next week's board meeting, announcing the decisions afterward.

Yang added that although the latest May Consumer Price Index (CPI) showed a larger increase, some institutions still believe Taiwan's long-term prices are stable, and compared with major economies, Taiwan's prices remain relatively stable.

On housing market controls, Yang clearly stated, "Selective credit controls stop here."

Lawmaker Lin Te-fu of the Kuomintang asked about the central bank's earlier Facebook post suggesting that under a K-shaped economy, relying solely on aggregate economic and financial indicators could mislead central bank decisions, and that interest rate tools alone may not be sufficient, possibly requiring more precise policy measures. He asked what these precise policy measures are.

Yang responded that in addition to stabilizing exchange rates and adjusting interest rates, the central bank also adjusts market funds through open market operations to absorb or release funds, as well as tools like the reserve requirement ratio.

Additionally, Lin asked whether the ongoing conflict in the Middle East would undermine the US dollar's hegemonic status. Yang said that in the foreseeable future, the US dollar will remain the world's most important currency, dominating the global financial order. Talk of de-dollarization is likely a much longer-term prospect.