Central Bank of the Republic of China (Taiwan)

The Central Bank of the Republic of China (Taiwan), also known as the CBC, is the central bank responsible for maintaining financial stability and issuing the national currency in Taiwan.
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Updated on Jun 4, 2024
Reading time 3 minutes

3 Key Takeaways

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  • The CBC plays a crucial role in Taiwan’s economy by setting monetary policy, managing foreign exchange reserves, and regulating the banking sector.
  • It is committed to maintaining price stability, promoting economic growth, and ensuring the soundness of the financial system.
  • The CBC operates independently from the government, allowing it to make decisions based on economic considerations rather than political pressure.

What is the Central Bank of the Republic of China (Taiwan)?

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The Central Bank of the Republic of China (Taiwan), established in 1949, is the central monetary authority of Taiwan. Its primary responsibilities include:

  • Monetary Policy: Formulating and implementing monetary policy to achieve price stability and promote economic growth.
  • Foreign Exchange Management: Managing Taiwan’s foreign exchange reserves and maintaining the stability of the New Taiwan Dollar (NTD).
  • Banking Supervision: Regulating and supervising banks and other financial institutions to ensure the safety and soundness of the financial system.
  • Currency Issuance: Issuing banknotes and coins and maintaining their integrity.
  • Economic Research: Conducting research on economic and financial issues to inform policymaking.

Importance of the Central Bank of the Republic of China (Taiwan)

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  • Price Stability: The CBC’s primary goal is to maintain price stability, which is essential for economic stability and sustainable growth.
  • Financial Stability: The CBC plays a crucial role in safeguarding the stability of Taiwan’s financial system, protecting depositors, and ensuring the smooth functioning of financial markets.
  • Economic Growth: The CBC’s monetary policy decisions can influence interest rates, credit availability, and exchange rates, which in turn impact economic activity and growth.
  • International Reserves Management: The CBC manages Taiwan’s foreign exchange reserves, which are crucial for maintaining external stability and supporting the NTD.

How the Central Bank of the Republic of China (Taiwan) Works

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The CBC operates under the Central Bank of the Republic of China Act, which grants it a high degree of independence from the government. Its decision-making body is the Board of Directors, which is composed of experts in economics, finance, and related fields. The CBC also has a number of departments and bureaus responsible for specific functions, such as monetary policy, banking supervision, and foreign exchange management.

Real-World Applications

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The CBC’s policies and actions have a significant impact on Taiwan’s economy and financial system. Its decisions on interest rates, exchange rates, and banking regulations can affect businesses, consumers, and investors. The CBC also plays an important role in international financial cooperation and works closely with other central banks to promote global financial stability.


Sources & references

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