Taiwan Monetary Policy


Central Bank leaves interest rates unchanged

At its 26 September monetary policy meeting, the Central Bank of the Republic of China (Taiwan) made a unanimous decision to leave the discount rate unchanged at 1.875%. The decision was in line with market expectations of no change. The Bank has kept its reference rate unchanged since June 2011.

According to the press release from the Board of the Central Bank, growth in advanced economies is gaining some steam, while economic activity in emerging market economies has stabilized. Although the Taiwanese economy is performing somewhat above earlier expectations, the Bank claimed that uncertainty regarding the global outlook poses risks to the export-driven economy. The Bank noted that inflationary pressures remain subdued due to weak domestic demand and stable commodity prices.

The Bank also warned that uncertainty in the global outlook remains and that it will closely monitor economic and financial developments to implement interest rate changes if necessary. In addition, the Bank announced that will keep a watchful eye on banks' real-estate lending policies, as eventual raises in interest rates could increase financial risks for these institutions and also for consumers.

Focus Economics Consensus Forecast panelists see the discount rate at 1.89 % in 2013, which is unchanged from previous month's forecast. For 2014, panelists expect the discount rate at 2.14%, which is
down 0.01 percentage points from previous month's estimate.


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Taiwan Monetary Policy Chart

Taiwan Monetary Policy September 2013

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