Market analysts say that Taiwan’s central bank is expected to cut its key interest rates by 0.125 percentage points in an upcoming quarterly policymaking meeting on March 24.
Market insiders are closely watching measures taken by the US Federal Reserve. They say that for Taiwan’s central bank, cutting interest rates is almost a foregone conclusion in its efforts to curb hot money.
The central bank slashed interest rates by 0.125 percentage points in December. If the forecast for March turns out to be true, it will be the third consecutive quarter for the central bank to lower interest rates at a time when the local economy has been sluggish.
A senior economist with Standard Chartered Bank, Tony Phoo, said that Taiwan's economy is expected to continue to encounter road bumps and it is possible for the local economy to record a contraction in the first quarter of this year.
He said that while the economy could return to growth in the second half of the year, it remains to be seen how the pace of the economic recovery will pick up.