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Fed QE withdrawal barely impacted Taiwan: central bank

TAIPEI, Taiwan -- The central bank said on Tuesday that the United States Federal Reserve's tapering off of its quantitative easing (QE) program has had less of an impact on Taiwan than on other emerging economies, according to the Central News Agency (CNA).

CNA cited unnamed sources to report that the central bank said in an advance copy of a report, due to be delivered at the Legislature on Thursday, that some industrialized countries adopted QE policies during the global financial crisis.

But the policy has not necessarily benefited the world economy, it said, and could instead impact emerging economies and disrupt the stability of the world financial market.

The report said that the impact on Taiwan has been comparatively small, as the country's current account has continued to show a surplus and it boasts ample foreign exchange reserves and limited foreign debts, reducing the pressure of capital flight.

Germany-based research firm Ifo Institute recently published a survey holding expounding a similar view. The Ifo Institute conducted the survey by collecting opinions from experts and economists in different countries. Fourteen questionnaires were sent out in Taiwan, and eight of them were returned.

While talking about the U.S. Fed's decision to scale back QE, most experts interviewed said they expect both long- and short-term interest rates to rise, but it will have a limited impact on the overall economy. Economists believe QE tapering will not impact Taiwan's GDP and foreign investment.

However, with foreign capital expected to be withdrawn from emerging markets, the scaling back of QE may send waves through local stock and exchange markets, resulting in local currencies' depreciation. If the economies of emerging countries underperform, Taiwan's exports may take a hit.

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