Thursday, Taiwan's central bank left its key interest unchanged at an all time low of 1.25% after cutting the rate seven times since September 2008. Economists had expected the bank to further lower the rate to 1%.

The central bank also kept the rate on accommodations with collateral at 1.625% and the rate on accommodations without collateral at 3.50%, effective from March 27.

In a statement accompanying the monetary policy decision, the central bank said global economic downturn has hit the domestic economy by hurting exports. Overseas sales continued to contract year-on-year in the first two months of 2009.

More recently, some of the industries reported a recovery in export orders, while shopping vouchers given out by the government boosted domestic consumption. In addition, tourist arrivals increased and local stock markets rebounded. Meanwhile, inflationary pressure is muted as import prices of oil and other commodities decline.

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