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Taiwan central bank likely to freeze key interest rate: Survey

Measures to cool country's overheating housing market also expected

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Taiwan's central bank expected to freeze key interest rate in monetary policy meeting. 

Taiwan's central bank expected to freeze key interest rate in monetary policy meeting.  (CNA photo)

TAIPEI (Taiwan News) — The next meeting of Taiwan's monetary policy committee is scheduled on Thursday (Sept. 23), and the body is expected to keep the discount rate at 1.125% for the sixth quarter, according to a survey of local bankers.

The meeting coincides with the U.S. Fed meeting. In a survey conducted by Commercial Times, executives of financial institutions unanimously forecast a rate freeze during the upcoming monetary policy meeting in Taiwan.

The projection comes after mild inflation and steady domestic growth, as noted by central bank governor Yang Chin-long (楊金龍) in his response to a legislator's question in August.

"It's unlikely the central bank will hike the rate ahead of the U.S. Federal Reserve, according to its traditional practice," said Wu Meng-tao (吳孟道), director of the Taiwan Institute of Economic Research (TIER).

He explained that the blow dealt by the COVID-19 pandemic to the domestic-oriented service sector remains, despite the impressive GDP growth forecast, offering no incentive for a rate increase at the moment. Taiwan's economy is anticipated to grow by 5.88% in 2021, according to the country's top statistics agency in August.

Measures to cool the country's overheating housing market, however, are expected in Thursday's meeting, UDN reported.