Central Bank of Taiwan Holds Interest Rate at 1.875%

The Central Bank of the Republic of China (Taiwan) held its discount rate unchanged at 1.875% and the collateralized loan rate at 2.250% and the unsecured loans rate at 4.125%.  Bank Governor, Perng Fai-nan, said: "Overall, Taiwan's economy continues to register moderate growth amid global economic uncertainties, while the 2012 price trends still require close monitoring. In addition, interest rates are at low levels. Against this backdrop, the Board judges that the current policy stance is conducive to economic and financial stability and will support economic growth in Taiwan."

Taiwan's central bank last raised the discount rate 12.5 basis points to 1.875% at its July meeting this year, also raising 12.5 basis points in March.  The Bank also recently raised the minimum liquidity requirements ratios.  Taiwan reported annual consumer price inflation of 1.01% in November, steady against earlier readings this year of 1.32% in July, 1.93% in June, 1.7% in May, and 1.3% in April, meanwhile the government is forecasting 2011 inflation of 2.1%.  

The Taiwan economy grew 3.37% year on year in the September quarter (5.02% in Q2 2011, and 6.2% in Q1 2011); slower than 2010's 10.9% economic growth rate, according to the Directorate General of Budget, Accounting and Statistics.  Taiwan's currency, the Taiwanese Dollar (TWD), has weakened about 5% against the US dollar this year, and the USDTWD exchange rate last traded around 30.30.

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