Central bank leaves interest rates unchanged

The Central Bank of the Republic of China (Taiwan) said Thursday after concluding a quarterly policymaking meeting that it has decided to leave its key interest rates unchanged.

It was the second consecutive quarter in which the central bank maintained its interest rates, with the discount rate unchanged at 1.375 percent, the rate of accommodations with collateral at 1.750 percent, and the rate of accommodations without collateral at 3.625 percent.

The decision had been widely anticipated by the local financial market, since the pace of Taiwan’s gross domestic product (GDP) is expected to be mild in 2017, and not strong enough to prompt the central bank to tighten its monetary policy.

In late November, the Directorate General of Budget, Accounting and Statistics forecast that Taiwan’s GDP will grow 1.87 percent in 2017, up from an estimated 1.35 percent increase for 2016.

Earlier this month, Standard Chartered Bank said it is possible that the central bank will leave interest rates unchanged for the whole of 2017, while some other market analysts said that any interest rate adjustment is unlikely until the second half of next year.

The analysts said that the decision by the central bank to keep its monetary policy intact for now shows that the bank is keen to maintain ample liquidity in the local market at a time when the economy still needs more funds to move ahead.

They added that the central bank is expected to continue to watch closely how the global economy develops next year before adjusting interest rates.

Source: Focus Taiwan News Channel

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