Taiwan central bank to maintain a pro-growth monetary policy stance in June

The Taiwan central bank (CBC) is scheduled to hold its next quarterly Monetary Policy Committee (MPC) meeting on 25 June. Policy makers are expected to keep the policy re-discount rate unchanged at 1.875% for a 17th consecutive quarter. 

Weaker-than-expected Q1 GDP growth (+3.37% y/y) and the lack of upside risk to headline inflation justify maintaining a pro-growth stance. 

"We believe the CBC will keep policy rates unchanged for the rest of 2015, unless the economic recovery gains momentum and there are signs of imminent upside risk to inflation",says Standard Chartered.

The current downtrend in headline inflation is likely temporary, and due mainly to weak global oil and commodity prices, the reduction in the electricity bill since April, and the delay in taxi-fare hikes.