Taiwan's Monetary Policy

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Taiwan's central bank raised their interest rates from a record low of 1.25% to 1.375%, which was the first time since the year of 2008. When interest rates begin to increase it starts to become more expensive and difficult for people to borrow money, which is a relating factor with spending. With interest rates increasing this monetary policy will be considered contractionary. Due to the increase in interest rates spending will start to decrease which will have a decreasing affect among the aggregate demand, and the aggregate supply will have no affect.

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