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US tapering of QE expected to impact Taiwan little: CEPD

Taipei--The winding down of the U.S. quantitative easing policy is not expected to have much direct impact on Taiwan, Council of Economic Planning and Development (CEPD) Minister Kuan Chung-ming (管中閔) said Thursday.

The change of policy, however, could affect some Southeast Asian countries, which in turn might have an indirect effect on Taiwan, Kuan said.

He noted that due to an influx of hot money to Asia under the QE policy, some economies in the region have become overheated.

News about a QE withdrawal has led to obvious currency fluctuations in those countries, he said.

In light of the close relations between Taiwan and the Southeast Asian nations, Taiwan should pay extra attention to the possible effects of such currency fluctuations, he said.

In what is seen as the beginning of an exit from QE, the U.S. Federal Reserve announced Wednesday that it will cut back its monthly bond-buying program by US$10 billion to US$75 billion, starting from January.

Fed Chairman Ben Bernanke said the tapering off is a result of an improving U.S. job market. In November, the U.S. added more than 200,000 new jobs, with its unemployment rate dropping to 7 percent from 7.3 percent recorded in October.

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