Taiwan’s c. bank holds rates at 2% in June

Taiwan’s central bank kept its key interest rate unchanged on Thursday but raised reserve requirements for banks. The benchmark discount rate stayed at two per cent, in line with expectations.

This decision reflects ongoing uncertainty as Taiwan grapples with rising global inflation despite its export-driven economy benefiting from the chip demand surge.

The central bank revised its 2024 economic growth forecast upwards to 3.77 per cent from the previous estimate of 3.22 per cent. This suggests a potential rebound after the slowest growth in 14 years witnessed in 2023.

However, the bank trimmed its consumer price index (CPI) forecast for 2024 to 2.12 per cent from 2.16 per cent, indicating some hope for inflation moderation.

Despite the trimmed forecast, Taiwan’s May CPI rose to 2.24 per cent, exceeding both expectations and the previous month’s figure.

Attribution: Ruters