Taiwanese Interest Rate Cut to 1.625%

December 17, 2015

The Central Bank of the Republic of China cut its discount rate by 12.5 basis points.  This decision followed a similar action at the prior quarterly review in September but had not been expected by analysts who thought Fed tightening would deter a move now.  At five successive reviews from June 2010 to June 2011, the rate had been raised by 12.5 bps each time, and September’s cut was the first rate change since June 2011.  The two reductions late this year are meant to promote demand in Taiwan.  The economy is running a comfortably solid current account surplus and has enough international reserves to permit a second rate reduction in the officials’ opinion.

Copyright 2015, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.



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