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Central bank stops interest rate cut cycle

Central bank stops interest rate cut cycle

Taipei, Sept. 29 (CNA) The Central Bank of the Republic of China (Taiwan) said Thursday after concluding a quarterly policymaking meeting that it has decided to stop an interest rate cut cycle.

The central bank's move in its latest policymaking meeting left the discount rate unchanged at 1.375 percent, the rate of accommodations with collateral at 1.750 percent, and the rate of accommodations without collateral at 3.625 percent.

The decision to leave its key interest rates unchanged had been widely anticipated by the market as the local economy has shown signs of improvement, with exports -- which account for 60 percent of Taiwan's gross domestic product -- staging a rebound.

In a recent poll by Bloomberg, 14 out of 26 analysts surveyed had said that the central bank would not adjust its monetary policy in Thursday's meeting.

The central bank last cut interest rates in a quarterly meeting held at the end of June, marking the fourth consecutive quarter in which the bank had lowered rates in a bid to boost the fragile local economy.

The central bank said that leaving interest rates unchanged is expected to help stabilize domestic consumer prices and the local financial market.

Market analysts said that the central bank's latest decision is likely to prevent foreign funds from exiting the country since the U.S. Federal Reserve is about to raise interest rates later in the year. (By Chiu Po-sheng and Frances Huang)