Taiwan central bank raises key interest rate

TAIPEI, Taiwan — Taiwan raised its key interest rate for the fifth time in a year in a bid to combat inflation.

The island’s central bank Thursday raised the benchmark interest rate by 0.125 percentage point to 1.875 percent, saying the move will help stabilize Taiwan’s consumer prices and financial markets.

The central bank said Taiwan’s consumer price index rose 1.4 percent year-on-year in the January-May period, and the CPI is expected to rise 2.1 percent for all of 2011.

Taiwan officials estimate that Taiwan’s economy will grow 5.1 percent this year.