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Central bank leaves key interest rates unchanged

Central bank leaves key interest rates unchanged

Taipei, Dec. 29 (CNA) The Central Bank of the Republic of China announced Thursday that it will leave its key interest rates unchanged after concluding a quarterly policy making meeting at a time when the local economy has been showing signs of slowing down. After the quarterly meeting, the discount rate stood at 1.875 percent, the rate on accommodation with collateral at 2.25 percent and the rate on accommodation without collateral at 4.125 percent. The central bank has kept its key interest rates unchanged since the end of the third quarter of this year in an effort to stop the last interest rate hike cycle as local economic fundamentals have been impacted by the debt problems in the eurozone. Taiwan's economy has been affected by weakening global demand, manifested in declining exports -- which serve as the backbone of the island's economic growth.
According to the Directorate General of Budget, Accounting and Statistics (DGBAS), the country's exports in U.S. dollar terms in the second half of this year are expected to grow 9.93 percent from a year earlier, compared with a 16.87 percent increase recorded in the first half. Year-on-year export growth for 2012 is expected to further narrow to 5.27 percent, the DGBAS said. In November, the agency lowered its forecasts of economic growth for 2011 and 2012 to 4.51 percent and 4.19 percent, respectively, from previous estimates of 4.56 percent and 4.38 percent. Academia Sinica, Taiwan's top research institute, even predicted that gross domestic product growth will stand at 3.81 percent in 2012, compared with an estimate of 4.38 percent for 2011. Despite the economic slowdown, the institute said that as the local market remains awash in high liquidity, there is little room for the central bank to lower its interest rates for the moment. It added that the local economy is expected to bottom out in the first quarter of next year, with the possibility of an improvement in the second and subsequent quarters.
(By Kao Chao-fen and Frances Huang)


Updated : 2021-08-06 03:06 GMT+08:00