Taiwan leaves no room for rate cut

TAIPEI: Taiwan's decision to allow petrol prices to rise to ease the burden on state-run oil firm CPC Corp is set to lift inflation, all but ruling out any rate cut by the central bank but possibly triggering a rise in the Taiwan dollar to mitigate the impact on consumers.

The government announced on Sunday that petrol prices would rise by an average 10.7% effective yesterday. CPC has been absorbing higher crude oil costs in recent months, but its losses have reached a stage the government deems unsustainable.