Adjusting Exchange Rates in Response to the US Tariff War? Yang Chin-long Remains Noncommittal: Discussion at Central Bank Board Meeting in September

　　The Taiwan-US tariff negotiations have not yet reached a final conclusion, and a temporary 20% additional tariff rate is currently in effect. There have been continuous reports that the US has made demands regarding Taiwan’s exchange rate, prompting legislators from both ruling and opposition parties to express concern about potential changes in exchange rate policy. Central Bank Governor Yang Chin-long stated at the Legislative Yuan that the matter will be discussed at the board meeting in September, but emphasized that it would not be solely in response to the needs of a single industry.

　　Premier Cho Jung-tai, along with relevant officials, went to the Legislative Yuan today (8/25) to deliver a special report on "the progress, guidelines, and principles of Taiwan-US tariff negotiations, and an impact assessment of potential effects on Taiwan’s industries" and to answer questions. Both Democratic Progressive Party Legislator Lee Kun-cheng and Kuomintang Legislator Huang Chien-hao expressed concern about exchange rate policy.

　　Huang Chien-hao pointed out that during the first half of the year, while the US adjusted tariffs, Taiwanese exporters shipped large volumes of goods, resulting in strong economic momentum. However, industries generally expect that shipments in the second half of the year will not be as robust as in the first half, with the machine tool industry being the first to be affected. Economic growth may be revised downward again, and he inquired whether the central bank would adopt "defensive exchange rate control" measures, such as preemptive interest rate cuts.

　　Yang Chin-long first responded that the growth rate in the first half of the year reached 6.75%, and the second half is expected to maintain 2.3%, with the annual economic growth rate projected at 4.45%. The current inflation rate is slightly below 2%, falling within a stable range. The central bank will not adjust interest rates solely for a single industry but will make decisions based on overall indicators such as economic growth, prices, and exchange rates. The matter is scheduled to be discussed at the board meeting in September.