Taiwan's central bank takes a hawkish stance: Oil prices surpassing $100 do not rule out tightening the New Taiwan Dollar, Yang Jinlong says: closely monitoring the situation in Q2.

Taiwan’s Central Bank Governor Yang Jinlong made it clear in the Legislative Yuan: if oil prices rise to $100 per barrel, the year-on-year CPI growth rate could rise to 1.9%, and monetary policy may shift towards tightening. With the ongoing US-Iran war and rising expectations of Fed rate hikes, a global tightening resonance is taking shape, and signals of pressure on risk assets continue to strengthen.
(Background: Bloomberg: In the third week of the US-Iran war, Trump “decides the next step based on feelings,” the Strait of Hormuz raises prices in the global oil market)
(Background: Bitcoin struggles at $66,000, with three Federal Reserve officials warning: the Iran war makes rate cuts more distant)

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• Yang Jinlong reveals his cards: once inflation expectations form, the tightening card can be played at any time
• Global tightening resonance takes shape: Fed is also brewing rate hikes, crypto market under pressure
• The second quarter is a watershed: the direction of the war will determine the central bank’s next step

The surge in oil prices is no longer a warning but a reality that is happening. Taiwan’s Central Bank Governor Yang Jinlong today (30th) reported to the Legislative Yuan’s Finance Committee, straightforwardly revealing inflation numbers: estimating the annual average crude oil price at $85 per barrel, this year’s price growth rate is expected to be 1.8%—but if the average price rises to $100 per barrel, this figure will jump to 1.9%.

Currently, Taiwan’s 95 unleaded gasoline has risen to NT$33.9 per liter this week, approaching NT$34, reaching its highest level in over 11 and a half years. The conflict in the Middle East and the deadlock in the Strait of Hormuz have caused the international average oil price to rise by about 45% compared to the beginning of the year. The Central Bank’s board of directors already raised the oil price estimate to $85 per barrel in the first quarter meeting, which is a conservative response in advance.

Yang Jinlong reveals his cards: once inflation expectations form, the tightening card can be played at any time

Yang Jinlong clearly explained the two defense lines of the central bank in the Legislative Yuan. The first line: stabilize the exchange rate to prevent imported inflation from significantly pushing up prices; the second line: if societal expectations of inflation begin to solidify and spread, monetary policy will adjust towards a “tightening” direction.

He also revealed, “The second quarter board meeting is critical”—meaning the decision window around June will be a core time for the market to observe whether Taiwan’s central bank will officially turn hawkish. Currently, the monetary policy stance has been interpreted by the outside world as “slightly hawkish,” but has not yet triggered actual rate hikes.

The government is simultaneously launching a multi-layered buffering mechanism: a dual mechanism of minimum price and stable oil price to ease inflation, a special project to absorb at least 60% of the price increase, an extension of tax reductions on key raw materials until the end of September, and an expansion of fuel tax reductions to 50%. Starting in April, the tax on bottled gas will also be reduced by 50%. With these buffering measures already exhausted, it indicates that if oil prices continue to rise, the central bank will face greater pressure on monetary policy.

Global tightening resonance takes shape: Fed is also brewing rate hikes, crypto market under pressure

Taiwan’s central bank’s hawkish signal is not an isolated event. As the US-Iran war enters its third week, the situation in the Strait of Hormuz remains tense, and international oil prices are fluctuating at high levels, prompting the market to start repricing the Fed’s rate path—some market participants expect the Fed may raise rates instead of cutting them.

This has direct implications for the cryptocurrency market: central bank tightening raises the risk-free rate, compressing the valuation space for risk assets; the simultaneous hawkish shift in the US and Taiwan, compounded by geopolitical risks in the Middle East, creates an environment with multiple sources of pressure acting simultaneously. Bitcoin is currently consolidating around $66,000, with weak short-term technical momentum, and the fundamental expectation of tightening liquidity—upside potential is limited, and volatility may increase again around the second quarter policy window.

It is worth noting that Yang Jinlong also provided a relatively positive economic outlook: if the conflict ends shortly and does not affect CSP (cloud service provider) capital expenditure, Taiwan’s export momentum can maintain levels comparable to last year, adopting a “cautiously optimistic” attitude; the central bank also significantly raised its 2026 economic growth forecast to 7.28%, with AI export waves being a major support. However, this positive scenario is predicated on the conflict not dragging on and inflation not rising further.

The second quarter is a watershed: the direction of the war will determine the central bank’s next step

The current decision-making logic of Taiwan’s central bank heavily depends on whether the situation in the Middle East can converge in the short term. If tensions in the Strait of Hormuz persist, oil prices stabilize at high levels, and inflation expectations solidify among the public, Yang Jinlong has clearly stated that “using tightening tools cannot be ruled out”—this means that rate hikes are not impossible, but the timing has not yet matured.

For the crypto market, the direct impact of Taiwan’s central bank turning hawkish is limited, but it is a piece of the global tightening resonance puzzle. When Taiwan, the United States, and even other central banks affected by oil prices tighten simultaneously, the overall liquidity environment contracts, and historically, such phases have not been friendly to Bitcoin’s medium-term trends. The key time window in the second quarter is precisely the point to confirm whether this risk can converge.