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Central bank leaves interest rates unchanged

2019/09/19 17:44:08

Taipei, Sept. 19 (CAN) Taiwan's central bank said Thursday that it has left its key interest rates unchanged after concluding a quarterly policymaking meeting.

It also upgraded its forecast for Taiwan's gross domestic product (GDP) growth for 2019.

It was the 13th consecutive quarter in which the central bank had maintained its monetary policy.

After the decision, the central bank's discount rate was left steady at 1.375 percent, rates on accommodations with collateral at 1.750 percent and accommodations without collateral at 3.625 percent.

Meanwhile, it raised its forecast for Taiwan's 2019 GDP growth to 2.4 percent from its previous estimate of 2.06 percent growth made in the second quarter.

Before Thursday's meeting, the market had widely anticipated that the central bank would leave interest rates intact for the moment, although major central banks around the world have engaged in rate cuts to boost the economy amid the continued trade friction between the United States and China.

Overnight, the U.S. Federal Reserve lowered its key interest rates by 0.25 percentage points but did not hint at more cuts down the road.

The European Central Bank announced last week a lowering of its key interest rates by 10 basis points to minus 0.5 percent and said it will kick off a quantitative easing program that will entail 20 billion euros (US$22 billion)-worth of net asset purchases per month if necessary.

Analysts said the local market remains awash in liquidity and Taiwan's economic fundamentals remain sound, so it is unnecessary for the central bank to cut interest rates to stimulate the local economy for the moment.

The analysts added that despite no rate change for the 13th quarter, interest rates in the local market have still been low and there is no need for the bank to worry about any inflow of foreign hot money.

(By Wu Chia-jung and Frances Huang)
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