Taiwan trims interest rate again to boost economy

AFP, TAIPEI: Taiwan's central bank cut its key interest rate yesterday for the second time in less than three months, in a fresh bid to bolster the sluggish economy battered by weak exports.
Taiwan has been struggling to spur growth in its  export-focused economy, which has suffered amid a slow recovery from the global financial crisis, while also facing greater competition in the key tech sector.
The central bank said Thursday the interest rate would be lowered from 1.75 per cent to 1.625 per cent.
Cutting interest rates tends to lower the cost of loans by companies and is often done to boost growth.
"Through the surprise cut, the central bank sent out a clear signal that the economic performance is really poor," Gordon Sun, the head of the Macroeconomic Forecasting Center at Taiwan Institute of Economic Research, told AFP.
He was referring to worse-than-expected exports this year and the gloomy outlook for the sector in 2016.
"The central bank knows the mild cut is unlikely to provide a huge help in lifting the struggling economy, but through widening the interest rate (difference) between Taiwan and the United States, the central bank would like to help lower the strength of local currency and therefore increase the competitiveness of Taiwan-made products abroad." "To be honest, there's little else the central bank can do to help the economy."
Taiwan's exports in November posted their steepest year-on-year drop in more than six years, the tenth consecutive month of year-on-year declines.

Taiwan trims interest rate again to boost economy

AFP, TAIPEI: Taiwans central bank cut its key interest rate yesterday for the second time in less than three months, in a fresh bid to bolster the sluggish economy battered by weak exports. Taiwan has been struggling to spur growth in its export-focused economy, which has suffered amid a slow recovery from the global financial crisis, while also facing greater competition in the key tech sector. The central bank said Thursday the interest rate would be lowered from 1.75 per cent to 1.625 per cent. Cutting interest rates tends to lower the cost of loans by companies and is often done to boost growth. Through the surprise cut, the central bank sent out a clear signal that the economic performance is really poor, Gordon Sun, the head of the Macroeconomic Forecasting Center at Taiwan Institute of Economic Research, told AFP. He was referring to worse-than-expected exports this year and the gloomy outlook for the sector in 2016. The central bank knows the mild cut is unlikely to provide a huge help in lifting the struggling economy, but through widening the interest rate (difference) between Taiwan and the United States, the central bank would like to help lower the strength of local currency and therefore increase the competitiveness of Taiwan-made products abroad. To be honest, theres little else the central bank can do to help the economy. Taiwans exports in November posted their steepest year-on-year drop in more than six years, the tenth consecutive month of year-on-year declines.