Taiwan: Central Bank stays put
March 27, 2014
At its 27 March monetary policy meeting, the Central Bank of the Republic of China (Taiwan) decided to leave the discount rate unchanged at 1.875%. The Bank's decision was on par with market expectations. The Central Bank has left the key monetary policy rate unchanged since June 2011. In its statement, the Central Bank said that the recovery in the global economy continued at the outset of the year. However, the Bank recognized that risks in emerging economies persist, particularly in China, where economic growth has been decelerating, “as it sought structural rebalancing.” Domestically, monetary authorities stated that recent data suggest that growth slowed down in the first quarter, although labor conditions remain positive. Regarding price developments, the Central Bank noted that inflationary pressures from overseas remain subdued and that slower economic growth and a negative output gap are also keeping inflationary pressures contained. The Bank concluded that monetary authorities continued to manage market liquidity in order to maintain banks' excessive reserves “at an appropriate level” and that, “the current monetary policy is appropriate and a policy rate hold will help maintain price and financial stability and foster economic growth.” Focus Economics Consensus Forecast panelists see the discount rate at 1.89% in 2014. For 2015, panelists expect the discount rate at 2.14%.
Author: Ricardo Aceves, Senior Economist