2016.09.2909:44:00UTC+00Taiwan Central Bank Holds Key Interest Rate Unchanged

Taiwan's central bank held its key interest rate steady on Thursday, after four successive reductions, citing moderate global growth and renewed growth momentum in the domestic economy amid a mild inflation outlook.

The Board of the Central Bank of the Republic of China (Taiwan) left the benchmark discount rate at 1.375 percent, in line with economists' expectations.

"Against a backdrop of moderate global growth and renewed momentum for the domestic economy, along with a mild inflation outlook for next year, the Board judged that a policy rate hold is conducive to price and financial stability and an accommodative monetary policy stance helps to foster economic growth," the bank said in a statement.

The bank also said that it will intervene in the currency market in the event of excess volatility and disorderly movements in the Taiwanese dollar exchange rate.

The government has predicted economic growth of 1.22 percent for this year. The pace is expected to improve to 1.88 percent next year on the back of better export growth, and higher private consumption and investment.

Capital Economics economist Gareth Leather pointed out that there was little prospect of a strong rebound anytime soon with subdued global demand set to drag on export growth, falling house prices to weigh on private consumption and fiscal policy to remain tight.

And, inflation is unlikely to be a barrier to further loosening, the economist added.

"Having left interest rates on hold today, we think it may now leave rates on hold in the short-term," Leather said.

"But given the poor growth outlook for 2017, there is still a good chance the CBC will resume its rate cutting cycle next year."