Taiwan Raises Interest Rates (RTTNews) - Taiwan's central bank on Thursday raised its benchmark interest rates for the third time this year, citing an expected spike in inflation and continuing asset price rises.
The Central Bank of the Republic of China (Taiwan) hiked
the discount rate to 1.625% from 1.500%. The decision was in line with economists' expectations.
The central bank also raised the
secured loans rate to 2.000% from 1.875% and the
unsecured loans rate to 3.875% from 3.750%. New rates are effective from December 31.
Taiwan's inflation rose to 1.53% in November from 0.56% in October, reflecting higher food prices. The Directorate General of Budget, Accounting and Statistics expects the country's consumer price inflation to be at 0.98% this year and 1.85% next year.
Since July, the central bank sought banks' efforts to curb real estate speculation. Banks were also urged to apply prudent loan terms to large-scale financing for
high-priced land purchases and to perform diligent evaluation and property appraisals on land development projects and collaterals.
Taiwan's economic growth slowed in the third quarter and further moderation is expected for the final three months of the year.
Gross domestic product rose 9.8% year-on-year during July to September. Growth eased from 12.86% recorded in the second quarter.
In November, the statistical agency said it expects GDP to grow 9.98% this year and 4.51% next year.
Wednesday, Taiwan's central bank said it is investigating activity in the foreign exchange market after noticing "unusual" trading activity over the past few days.
The island's central bank said a small number of foreign exchange banks had
targeted specific times of the day to sell off large quantities of currencies.
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