Friday, March 23, 2012

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.


  1. I've hear the People's Bank of China has cut the RRR again, is that true??

    1. Hi there. There's nothing on the PBOC website - will keep an eye on this and post any updates. Stay tuned.

    2. Would not be at all surprised if they did cut after that flash HSBC PMI shocker, I still reckon we'll see the bottom for activity and growth levels in Q1/Q2 this year, but I think the authorities are gunna need to step up and put some decent and intelligent stimulus measures in place.