TAIPEI (Reuters) – Taiwan’s central bank raised its policy rate on Thursday in a surprise move reflecting continued concerns about inflation despite recent turmoil on global financial markets, and cut its outlook for the island’s economic growth this year.
The central bank, in a unanimous decision, raised the benchmark discount rate by 12.5 basis points (bps) to 1.875%.
Economists in a Reuters poll had mostly expected the central bank to stand pat, though eight of the 24 economists surveyed expected the central bank would lift the rate to 1.875%.
The decision came after the U.S. Federal Reserve on Wednesday raised interest rates by a quarter of a percentage point, but indicated it was on the verge of pausing further increases in borrowing costs after the recent collapse of two U.S. banks.
Taiwan’s central bank again cut its 2023 estimate for economic growth to 2.21% from its previous forecast of 2.53% in December.
It also raised its consumer price index forecast for this year to 2.09% from a previous prediction of 1.88%.
(Reporting by Liang-sa Loh and Faith Hung; Writing by Ben Blanchard; Editing by Jacqueline Wong)
