Central bank maintains policy rates

UNCERTAINTY:Economist Lucas Lee said the bank might retain the rates in the first half of next year to judge US president-elect Donald Trump’s effect on the economy

Taipei Times
Date: Dec 23, 2016
By: Crystal Hsu / Staff reporter

The central bank yesterday kept its policy interest rates unchanged for the second consecutive quarter,

Central bank Governor Perng Fai-nan yesterday gestures during a news conference in Taipei after the bank announced that it had decided to maintain its policy interest rates due to benign inflation. Photo: Wang Yi-sung, Taipei Times

saying the nation’s economy is experiencing stable growth, but the pace is not fast enough to merit a policy change.

“The board meeting decided to maintain a loose monetary policy stance as uncertainty over the global economy lingers,” Governor Perng Fai-nan (彭淮南) told a news conference in Taipei.

Benign inflation, forecast to rise to between 1 percent and 1.5 percent by different research institutes, means there is no urgency in ending the “status quo,” the central bank said.

The decision means the bank’s discount rate remains at 1.375 percent, the collateralized loan rate at 1.75 percent and the unsecured loan rate at 3.625 percent.

Economists have said the central bank would maintain its rates for at least another six months, allowing the export-focused economy more room to recover from the slowdown in China and a mixed showing in the eurozone.    [FULL  STORY]

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