Taiwan’s central bank cuts discount rate by another 12.5 bps to 1 5/8%

By Angela McDaniels

Tacoma, Wash., Dec. 18 – The Central Bank of the Republic of China (Taiwan)’s board decided to decrease the bank’s policy rates by 12.5 basis points at its meeting on Friday, according to a news release.

The discount rate, the rate on accommodations with collateral and the rate on accommodations without collateral were lowered to 1 5/8%, 2% and 3 7/8%, respectively.

As previously reported, the board lowered the rates to 1¾%, 2 1/8% and 4%, respectively, in September.

The board said that since the September meeting, the pace of global economic recovery has fallen short of expectations and the domestic growth forecast has been revised down. Meanwhile, the negative output gap has widened, and inflation expectations are mild.

Against this backdrop, the board judged that cutting the policy rates and maintaining the M2 growth target range at 2.5% to 6.5% to keep monetary conditions accommodative will help foster economic growth.

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