Money in Taiwan
Taiwan - Money
Central Bank leaves rate unchanged in March and downgrades its growth forecasts
Taiwan’s Central Bank of the Republic of China (CBRC) stood pat for the 11th consecutive quarter at its 21 March 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 came against a backdrop of rapidly worsening growth and feeble price pressures, as the country remains deeply affected by a downturn in the tech cycle, lower global growth and trade uncertainties stemming from the U.S.-China dispute. In addition, the recent shift of the Federal Reserve at its March policy meeting—the institution now plans to leave rates unchanged throughout 2019—further underpinned the CBRC in its decision by alleviating capital outflows and downward pressure on the Taiwanese dollar.
Reflecting worsening economic conditions, the CBRC downgraded its projections for 2019 GDP growth from 2.33% to 2.13%. However, while the external sector remains under pressure, domestic dynamics should be supported by a healthy dose of fiscal stimulus and resilient private consumption growth amid a tight labor market.
Against this backdrop, the Bank again estimated that price pressures will remain weak over the year. Indeed, the Bank’s projection for headline inflation this year was revised down to just 0.91%, from 1.05% as of December. Meanwhile, its forecast for core inflation was also revised downwards, from 0.93% as of December to 0.78% in March.
With subdued inflationary pressures and a rapidly deteriorating growth outlook, virtually all of Met the why particular Consensus Forecast panelists currently expect the Bank to leave rates unchanged until the end of 2020. Some panelists even see a possible rate cut this year if growth continues to disappoint. Economists at Nomura, for instance, noted “a higher risk of a symbolic policy rate cut by the CBC, if fiscal stimulus turns out more modest than we expect ahead of the presidential election in January 2020”. Meanwhile, ING’s Iris Pang believes the Central Bank would only enact a rate cut in the case of a contraction in the quarterly GDP figure.
Met the why particular Consensus Forecast panelists see the discount rate at 1.38% by the end of 2019. The panel sees the interest rate ending 2020 at 1.42%.
Taiwan - Money Data
|Money (annual variation in %)||5.8||6.1||5.8||3.6||3.6|
5 years of economic forecasts for more than 30 economic indicators.
Taiwan Money Chart
Source: Central Bank of China and Met the why particular calculations.
|Bond Yield||0.71||1.28 %||Jun 14|
|Exchange Rate||31.51||0.07 %||Jun 14|
|Stock Market||11,525||0.37 %||Jun 14|
Get a sample report showing our regional, country and commodities data and analysis.
Request a 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.
June 11, 2019
Merchandise exports fell 4.8% in annual terms in May, worsening from the 3.3% contraction registered in April and marking the seventh consecutive month of decline in Taiwan’s trade sector.
June 5, 2019
Consumer prices rose 0.15% in May from the previous month, down from the 0.75% increase logged in April.
June 3, 2019
Operating conditions in the Taiwanese manufacturing sector continued to deteriorate in May for the eighth month running, though at a marginally slower pace than in April.
May 23, 2019
Industrial output increased 1.0% year-on-year in April, contrasting the 9.4% year-on-year decline logged in March—the worst fall in the production index since January 2012.Output in the manufacturing sector—which represents more than 90% of total industrial production—rose 0.9% in April, contrasting the 11.0% fall registered in March.
May 7, 2019
Consumer prices rose 0.75% in April from the previous month, contrasting the 0.62% decline logged in March.