Central Bank of the Republic of China (Taiwan)

June 27, 2013

Taiwan’s discount rate was left unchanged at 1.875%, where such has been for the past two years.  The unanimous vote to keep the status quo was anticipated.

Based on an assessment of lingering global economic uncertainties, a mild recovery of the domestic economy and subdued inflationary pressures, the Board judged that the current policy stance is conducive to price and macroeconomic stability.

On-year GDP growth was 1.7% last quarter, while CPI inflation had an average rate of 1.5% over the first five months of the year.

Benchmark interest rate history:  The key rate was slashed from 3.625% to 1.25% between September 2008 and February 2009, held at 1.25% until June 2010.  Monetary policy is reviewed quarterly, and the key rate was lifted by 12.5 basis points at five consecutive reviews beginning in June 2010 and ending at the June 2011 meeting.

As before, today’s statement reserves the right to intervene in currency markets to counter disorderly market conditions but generally defers to market forces to set the exchange rate.

Copyright 2013, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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