Taiwan central bank leaves key interest rates unchanged

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Subscribe to enjoy similar stories. Taiwan’s central bank held interest rates steady with a watchful eye on inflation, declining to join the U.S. Federal Reserve and a growing number of its Asian counterparts in starting to ease monetary policy.

The Central Bank of the Republic of China (Taiwan) kept its benchmark discount rate at 2.000% on Thursday, as expected in a poll of six analysts by The Wall Street Journal. It maintained its secured loan rate and unsecured loan rate at 2.375% and 4.250%, respectively. The Taiwanese central bank attributed the decision to a gradual downward trend in domestic inflation and the global economic situation.

Thursday’s move came after the CBC stood pat at its previous meeting in June after delivering a surprise hike of 12.5 basis points in March to guard against inflation risks. Inflation in Taiwan has shown signs of stickiness in recent months. Higher prices of vegetables and fruits kept the consumer-price index above the central bank’s threshold in August, and it has expressed concern about the housing market.

The CBC has recently stepped up efforts to cool the property market, which has seen a pickup in transactions and home-purchase loans since the second half of last year. After raising the reserve-requirement ratio by 25 basis points in June, it met with representatives from 34 commercial banks in late August and told them to reduce property lending. However, as core inflation has remained stable at 1.8% over the past three months, Goldman Sachs analysts don’t expect the over 2% headline inflation prints to trigger another rate hike, they said in a note before the CBC decision.