Interest Rate in Taiwan
Taiwan - Interest Rate
Central Bank stands pat in September as trade war headwinds mount
Taiwan’s Central Bank of the Republic of China (CBRC) maintained course for the ninth consecutive quarter at its 27 September monetary policy meeting. The Board of Directors of the CBRC unanimously decided to leave the discount rate unchanged at 1.375%, matching analysts’ expectations. The decision was made against the backdrop of mild inflationary pressures, robust—yet softening—domestic momentum, along with growing headwinds for the all-important external sector due to the recent escalation of the US-China trade war.
Although the CBRC revised its 2018 growth forecasts marginally upwards from 2.68% in June to 2.73% in September—in light of a strong Q2 print—the institution sees momentum softening somewhat in H2 and beyond amid a global slowdown and increased financial volatility, notably in emerging markets such as Turkey and Argentina. Indeed, the Bank projected this slowdown to affect Taiwanese export growth and investment in 2019, although it noted that this should be somewhat compensated by an increase in public investment, while private consumption growth will remain the backbone of economic growth. Overall, the CRBC forecast GDP to increase 2.48% in 2019.
Against this backdrop, the Bank estimated that the inflation outlook should remain mild in coming quarters. Although it slightly raised its 2018 inflation and core inflation projections to 1.50% and 1.28%, respectively (June: 1.40% and 1.16%, respectively), it also forecast both headline and core inflation to slow down markedly in 2019, to 1.05% and 1.00%, respectively. A small majority of FocusEconomics Consensus Forecast panelists currently expect the Bank to leave the policy rate unchanged until the end of the year, with the first rate hike likely occurring in Q1 2019. Nevertheless, due to a strong 2018 growth outlook and the exchange rate pressure brought upon by continuous interest rate hikes by the U.S. Federal Reserve, a number of our panelists see the rate hike happening at the next monetary policy meeting, which is scheduled for 27 December.
FocusEconomics Consensus Forecast panelists see the discount rate at 1.44% by the end of 2018. The panel sees the interest rate ending 2019 at 1.61%.
Taiwan - Interest Rate Data
|Policy Interest Rate (%)||1.88||1.88||1.63||1.38||1.38|
5 years of economic forecasts for more than 30 economic indicators.
Taiwan Interest Rate Chart
Source: Central Bank of China.
|Bond Yield||0.86||1.28 %||Jan 14|
|Exchange Rate||30.85||0.07 %||Jan 14|
|Stock Market||9,708||0.37 %||Jan 14|
Get a sample report showing our regional, country and commodities data and analysis.
Start Your Free Trial
Start working with the reports used by the world’s major financial institutions, multinational enterprises & government agencies now. Click on the button below to get started.
January 8, 2019
Consumer prices fell 0.50% in December from the previous month, up from the 0.61% decline logged in November.
January 7, 2019
Merchandise exports fell 3.0% in annual terms in December, a slight improvement over November’s 3.4% year-on-year contraction.
January 2, 2019
Operating conditions in the Taiwanese manufacturing sector deteriorated for the third consecutive month in December, indicating significantly weaker momentum in the fourth quarter.
December 24, 2018
Industrial output expanded 2.1% year-on-year in November, down markedly from the 8.3% growth registered in October.
December 7, 2018
Merchandise exports fell 3.4% in annual terms in November, markedly contrasting the 7.3% expansion logged in October, and falling short of market analysts’ expectations of a 1.3% growth print.