Taiwan Monetary Policy Left Unchanged after Quarterly Review

September 26, 2013

The Central Bank of the Republic of China retained a 1.875% key interest rate.  It’s been at that level since the last of five 12.5-basis point hikes squeezed between June 2010 and June 2011.  Officials reaffirmed “the current policy stance is conducive to price and financial stability as well as economic growth,” noting in particular that “the domestic economy has expanded moderately, and inflationary pressures are subdued.”  The released statement added that “global economic recovery is proceeding at a gradual pace, and uncertainty in the global economic outlook remains.”  Real GDP this year is projected to expanded some 2.3%, and inflation is running below 1%.  As officials have justified a role for currency market intervention at previous quarterly reviews, this statement declares again that “when seasonal or irregular factors (such as massive inflows or outflows of short-term capital) lead to excess volatility and disorderly movements in the NT dollar exchange rate with adverse implications for economic and financial stability, the Bank, in line with its statutory mandate, will step in to maintain an orderly market.”

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

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