Taiwan holds rate at 1 7/8%; inflation stable, geopolitical risks loom

By Susanna Moon

Chicago, June 26 – The Central Bank of the Republic of China (Taiwan) again unanimously decided to hold the discount rate at 1 7/8% at its meeting on Thursday.

The decision comes amid a stable inflation outlook on one hand with geopolitical risks on the other, leading to lingering uncertainties in the global economy, the bank said.

For the first five months of the year, the Consumer Price Index annual growth rate averaged 1.14%, mainly due to adverse supply-side factors that caused food prices to spike by 3.68%.

High food prices and a hike in international oil prices due to tensions in the Middle East pushed up inflation expectations, according to a bank notice.

Taiwan's exports grew at a steady pace, driven by the mild global economic recovery, the bank said, while consumer confidence drove private sector spending.

As noted before, the bank also decided at the meetings held on March 27, Sept. 26 and Dec. 30 to maintain the discount rate at 1 7/8%.

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