The Taiwan exchange traded fund (ETF), iShares MSCI Taiwan Index (EWT), fell 7.8% this week after the central bank raised its benchmark interest rate for the 15th consecutive quarter.

It also signaled that yet more increases are likely, report James Peng and Chinmei Sung for Bloomberg. The bank said that inflation might top the government’s target of 2%.

The Taiwan dollar fell from a ten-and-a-half-year high on Thursday, because of foreign fund outflows, causing the stock market the Taiwan stock market to fall lower. Before then, the dollar had posted gains for seven consecutive sessions, says Reuters.

The United States also is breathing a sigh of relief that Taiwanese voters chose a president who is committed to easing tensions with China and expand trade with the country, reports Foster Klug for the Associated Press. President-elect Ma Ying-jeou has promised to reverse the policy of emphasizing political separateness from China, and instead work to take more advantage of the mainland’s economic boom.

If this new era of cooperation works out, both economies could benefit.

Tags: Asia, Emerging Markets, Taiwan, UNG