Taiwan Central Bank Raises Discount Rate To 3.25%

Sep 20, 2007 - The central bank of Taiwan or the central bank of the Republic of China decided to increase discount rate by 12.5 basis points to 3.25% in its Monetary Policy Meeting Thursday.

Also, the rate on accommodations with collateral and the rate on accommodations without collateral rose 12.5 basis points each to 3.625% and 5.5%, respectively. The changes will be effective from September 21.

The central bank said market forces would determine the NT dollar exchange rate. But, the CBC will step in to maintain an orderly foreign exchange market, when seasonal or irregular factors such as hot money or irrational expectations disrupt the market.

The monitory policy committee took these decisions considering increasing CPI inflation, solid economic growth, improvement in the job market, appropriate monitory growth and low-level real interest rates that are still below the neutral level.