Unchanged Monetary Stance in Taiwan

December 19, 2012

The Central Bank of the Republic of China’s Board reviews monetary policy on a quarterly basis and has kept a 1.875% discount rate since a 12.5 basis point hike to that level in June 2011.  That was the fifth consecutive such increase from a 16-month-long trough of 1.25%.  In the Great Recession, the discount rate was slashed between September 2008 and February 2009 from 3.625% to 1.25%.

A statement released by Taiwanese monetary officials also unveiled an M2 money growth target of 2.5-6.5% for 2013 whose midpoint of 4.5% is marginally above the actual 2012-to-date pace.  The statement speaks of a more stable global environment, a modest domestic recovery, and subdued inflationary pressure.  Officials also reserve the right to intervene to maintain orderly new Taiwan dollar trading conditions but otherwise to let the currency’s value be determined by market forces.

Copyright 2012, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.



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