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Taiwan says won’t follow S.Korea’s rate cut for now

Posted by | May 10, 2013 .

TAIPEI (Reuters) – Taiwan’s central bank will not cut its benchmark interest rate after South Korea unexpectedly reduced interest rates the day before, but will maintain its presently loose monetary policy stance.

Pressure has mounted on Taiwan’s central bank to cut rates as many technology exporters have urged, so as to help them keep their products competitive against South Korea’s in overseas markets.

However, an official at the central bank said there would be no change in policy when asked about a potential rate cut.

”The central bank’s tone has not changed so far,” vice governor Yang Chin-long told a media briefing late on Thursday.

”Our inflation level is very mild. South Korea’s has eased, giving them room to cut rates.”

The central bank is set to hold a quarterly meeting next month to decide on its policy rate.

South Korea’s central bank cut interest rates for the first time in seven month on Thursday, surprising markets in a move aimed at helping to maximise the government’s stimulus efforts and ease pressure from a strong won currency.

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