Policy Easing at the Central Bank of the Republic of China

September 24, 2015

From Taipei today came word of the first central bank interest rate change there since June 2011, when the last of five straight 12.5-basis point hikes was engineered.  Like those moves, today’s action was decided at a regular quarterly monetary policy review.  Taiwan’s discount rate now falls back to 1.75% from 1.875%, and a statement was released, explaining that “the global economy is experiencing a slow recovery and many uncertainties remain. Meanwhile, the domestic economy moderates, the negative output gap widens, the inflation expectations are mild, and real interest rates stay relatively elevated” and therefore judging that “that a policy rate cut will help maintain price and financial stability and foster economic growth.”  The statement left the door open to more such moves if needed.

Copyright 2015, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.



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