The ROC Central Bank left Taiwan’s key interest rates intact March 28 in an effort to maintain financial stability and keep consumer price steady amid uncertainties abroad.
At its quarterly board meeting, the central bank kept the discount rate at 1.875 percent and the collateralized and unsecured loan rates at 2.25 percent and 4.125 percent, respectively. The rates have remained at current levels since July 2011.
Central Bank Gov. Perng Fai-nan said the decision to continue its “moderate easing policy” is appropriate in light of developments at home and abroad.
“Despite uncertainties in the Eurozone and U.S., the global economy remains on a slow recovery track as major economies around the world continue to implement loose monetary policies,” Perng said.
Weak demand for oil and other commodities worldwide as a result of moderate growth also helped keep inflationary pressures in check, he added.
On the domestic front, Perng said the local economy began picking up steam in the last quarter of 2012, with exports and private consumption posting better-than-expected results. Consumer prices look set to remain relatively stable this year.
Perng also stressed that the New Taiwan dollar to U.S. dollar exchange rate remains dynamically stable. The local unit closed at NT$29.941 March 27.
“While the NT dollar has depreciated 2.69 percent against the greenback since the end of 2012, the currency’s real effective exchange rate remains very close to the level three months ago,” he said, adding that such stability will help keep local financial markets in order and spur economic growth.
The central bank also announced that the Shanghai branch of Bank of Taiwan will begin offering NT dollar exchange services from April 2.
According to the cross-strait currency settlement agreement, which took effect Oct. 5 last year, Taipei-based BOT is the designated NT dollar clearing agent in mainland China. Beijing-based Bank of China is its counterpart in Taiwan.
The BOT said 13 mainland Chinese banks and nine branches of Taiwan banks operating across the strait will soon sign agreements with the BOT to become participating banks.
Under the current regulations of Taipei and Beijing authorities, individuals will be able to exchange up to NT$60,000 (US$2,000) per transaction at these financial institutions. (SDH)
Write to Meg Chang at sfchang@mofa.gov.tw