Taiwan Central Bank Leaves 1.25% Rediscount Rate But Will Reabsorb Excess Liquidity

March 25, 2010

The Central Bank of the Republic of China (Taiwan) kept its 56-year low 1.25% rediscount rate steady and did not raise reserve requirements, either.  However, officials announced that the reabsorption of excess funds in Taiwan’s financial system will pick up pace in the period ahead and that limits will be placed on property loans.  Taiwanese GDP rose 9.2% in the year to 4Q09.  CPI inflation was 2.4% in February, while the jobless rate in January printed at 5.7%.  From a prior peak of 3.625%, the rediscount rate was slashed during the Great Recession by 12.5 basis points in September 2008, 50 bps in two moves of 25 bps each in October, 25 bps in November, 75 bps in December, 50 bps in January 2009 and 25 bps in mid-February 2009.  There have been no subsequent changes.

Copyright Larry Greenberg 2010.  All rights reserved.  No secondary distribution without express permission.



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