Taiwan: Central Bank makes no change to discount rate
December 18, 2014
At its 18 December monetary policy meeting, the Central Bank of the Republic of China (Taiwan) left the discount rate unchanged at 1.875%, where it has been for the last three years. The Bank’s decision was on par with market expectations.
In terms of the global economy, the Central Bank commented that the U.S. economy is improving strongly, while the Euro area and Japan are both weakening. Meanwhile, the Bank noted that the recent decline in oil prices is keeping inflationary pressures subdued, but said that this could be helpful to the global economic recovery.
As a result of overall weak global conditions, Taiwan’s export growth has been moderating since October. The labor market, however, has been improving and the Bank commented that, “employment increased steadily on the back of rising corporate profits.” Regarding price developments, the Central Bank recognized that inflation has been falling since September due to the ongoing decline in oil prices.
The Monetary Policy Committee concluded that authorities continued to conduct open market operations in order to maintain market liquidity and excess reserves at an appropriate level.