Taiwan Central Bank Holds Rate at 1.875%

The Central Bank of the Republic of China (Taiwan) kept its discount rate unchanged at 1.875%, collateralized loan rate at 2.250% and unsecured loans rate at 4.125%.  Bank Governor, Perng Fai-nan, said: "On the domestic front, private investment was adversely affected by slack external demand that has weakened since the second half of last year. The Directorate-General of Budget, Accounting, and Statistics (DGBAS) forecast that in the year of 2012, the annual GDP growth rate of the first quarter would record a yearly low. However, the momentum is expected to gradually pick up in the subsequent quarters to expand by 3.85% in 2012 as a whole, slightly lower than last year's 4.04%."

Taiwan's central bank last raised the discount rate 12.5 basis points to 1.875% at its July meeting last 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 0.25% in February this year, down from 1.01% in November, 1.32% in July, 1.93% in June, 1.7% in May, and 1.3% in April.  The government is forecasting inflation to increase by an average 1.46% this year.

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 gained about 1% against the US dollar over the past year, and the USDTWD exchange rate last traded around 29.57.

www.CentralBankNews.info