Taiwan's Inflation Miss Clouds September Rate-Hike Call

Dow Jones09-08 17:47

0947 GMT - Taiwan inflation's return to target gives the central bank an excuse to stay on hold this month, ING's Lynn Song says. The decline in August's headline print adds uncertainty to ING's September rate-hike call but doesn't rule it out. Conditions for tightening remain in place, with GDP growth strong and underlying inflation pressures intact. August's food-led moderation doesn't change the bigger picture, says Song. Core inflation is fairly steady, and PPI inflation too high. But it does offer the central bank flexibility to push back a hike, especially with local elections coming. A hold or dovish hike from the Fed, which meets a day earlier, could factor in too. Still, Song thinks that even if the central bank holds this month, it will likely hike at its next meeting in December.

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