Taiwan central bank cuts economic growth forecast for 2023
Trims CPI forecast for 2023, but closely watching inflation
Central bank holds key rate at 1.875, as expected
Governor rates will only go down gradually

TAIPEI, Sept 21 Reuters Taiwan39;s central bank on Thursday flagged continued tight monetary policy as it keeps a close eye on inflation, and trimmed its 2023 growth forecast for the exportreliant economy.

Taiwan is a major producer of semiconductors used in everything from cars to smartphones and sluggish global demand has affected its many tech manufacturers.

With global demand hit by high inflation, rising interest rates and the impact of the Ukraine war on global demand, its economy slipped into recession in the first quarter though it returned to slight growth in the AprilJune quarter.

Taiwan central bank Governor Yang Chinlong told reporters after a quarterly ratesetting meeting that growth would start to pick up from the fourth quarter with global trade recovering next year.

However, he warned of risks, including China39;s economic slowdown and ChinaU.S. trade tensions, and that even with inflation projected below 2 for next year Taiwan39;s interest rates might need to remain a little higher for a little longer.

Our first priority is to watch for inflation, he said. Our interest rates went up gradually, and will go down gradually, unless the economy drops badly.

The central bank, in a unanimous decision, left the benchmark rate at 1.875, where…