Taiwan's central bank on Thursday retained its benchmark interest rate unchanged for the fifth consecutive quarter, citing risks to growth from weakening external demand. The decision was in line with economists' expectations.
The Central Bank of the Republic of China (Taiwan) kept its discount rate unchanged at 1.875 percent at the latest rate-setting session. The bank also maintained its secured loan rate at 2.25 percent and the unsecured loan rate at 4.125 percent.
The central bank said that the country's external demand has been facing headwinds created by its major trading partners.
At the same time, the domestic economy faces growing inflationary pressures, possibly to be further fueled by steeper inflation expectations driven by short-term capital inflows following the US Fed's third round of quantitative easing.
In August, the government had forecast that the annual GDP growth rate would rebound to 1.99 percent in the third quarter and further strengthen to 4.23 percent in the fourth quarter.
The country's inflation is forecast to accelerate to 2.32 percent in the fourth quarter, and reach 1.93 percent for the entire year. In the months July and August, inflation increased and averaged 2.94 percent on account of weather-related price disruptions and a lower base effect, combined with higher international oil and commodities prices.
by RTT Staff Writer
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