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Central bank leaves key interest rates unchanged

2012/09/20 17:41:39

Taipei, Sept. 20 (CNA) The Central Bank of the Republic of China announced Thursday after concluding a quarterly policymaking meeting that it has left key interest rates unchanged.

The move had been widely expected by the market as the central bank is aiming to take on rising inflationary pressure resulting from further foreign fund inflows, in particular after the U.S. Federal Reserve announced a third round of quantitative easing the previous week.

The central bank maintained the discount rate at 1.875 percent, the rate of accommodations with collateral at 2.25 percent, and the rate of accommodations without collateral at 4.125 percent.

It was the fifth consecutive quarter in which Taiwan's central bank left interest rates intact after it stopped a rate-hike cycle in the third quarter of last year in an effort to stimulate the local economy.

Market analysts said that due to upward pressure on local consumer prices, the central bank needs to pay close attention to inflation at the moment instead of cutting interest rates if it wants to effect a turnaround in the slowing economy.

In August, the government cut its 2012 economic growth forecast to 1.66 percent from an earlier estimate of 2.08 percent due to weakening exports.

(By Kao Chao-fen and Frances Huang)