Taiwan central bank raises benchmark rate in surprise move

By Thomson Reuters Mar 21, 2024 | 3:56 AM

TAIPEI (Reuters) – Taiwan’s central bank surprised markets by raising its policy rate on Thursday, and also lifted its inflation forecast for the year as inflationary pressures persist.

The central bank hiked the benchmark discount rate to 2% from 1.875%, where it has stood since last March.

In a Reuters poll, 25 out of 26 economists had predicted the central bank would keep the rate unchanged.

The move follows the U.S. Federal Reserve’s decision on Wednesday to leave rates on hold though it indicated it would stick with plans to cut borrowing costs this year.

Taiwan’s central bank raised its 2024 estimate for economic growth to 3.22% from a forecast of 3.12% in December.

The central bank also increased its consumer price index (CPI) forecast for this year to 2.16% from a previous prediction of 1.89%.

Taiwan’s CPI rose 3.08% in February, a 19-month high, as food prices climbed during the Lunar New Year holiday.

(Reporting by Liang-sa Loh and Faith Hung; Writing by Ben Blanchard; Editing by Jacqueline Wong)