Today, Taiwan’s central bank cut interest rates for the first time in six years. This pushed the Taiwan dollar lower versus the US dollar, though the fall was not very big.
The Central Bank of Taiwan cut its interest rate by 12.5 basis points, including the benchmark discount rate that has been reduced to 1.75 percent. The central bank offered following explanation for its decision:
In sum, the global economy is experiencing a slow recovery and many uncertainties remain. Meanwhile, the domestic economy moderates, the negative output gap widens, the inflation expectations are mild, and real interest rates stay relatively elevated. Against this backdrop, the Board judged that a policy rate cut will help maintain price and financial stability and foster economic growth.
The Taiwan dollar fell after the announcement, but its drop was not nearly as big as that of the Norwegian krone, which has also suffered from a rate cut.
USD/TWD rose 0.31 percent to 33.129 as of 17:06 GMT today.
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