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Fed's QE scale-back may be boon to Taiwan: economists

TAIPEI--The United States Federal Reserve's announcement that it will scale back quantitative easing (QE) means good things for Taiwan, economists said Thursday.

The Fed decision to reduce its monthly bond-buying by US$10 billion starting January indicates that U.S. economic recovery is no longer reliant on policy measures, according to Cheng Cheng-mount, president of the Taiwan Academy of Banking and Finance.

The moderate reduction has a “positive effect” on Taiwan's economy and bourse because it does not create worries over a sudden outflow of massive capital, as it will still be some time before the Fed ends its policy of injecting liquidity into the financial market for good, Cheng said.

A faster-than-expected improvement in the U.S. job market along with recovery in the U.S. housing market and in retail will also have a positive influence on Taiwan's non-electronics exporters, he added.

Chung-Hua Institution for Economic Research President Wu Chung-shu, meanwhile, said the positive response in the capital market reflected general views that the U.S. economy is on the way to recovery and the economic outlook is optimistic.

Growth in the U.S. and the recovering trends around the world will be a boon for Taiwan's exports, he said.

Yuanta-Polaris Research Institute President Liang Kuo-yuan echoed the sentiment, saying that Taiwan should not feel much impact from the Fed's decision because of the moderate level of the reduction.

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