TAIPEI (Taiwan News) — Taiwan’s Central Bank on Thursday (March 19) cut the interest rate to 1.125 percent, a lower rate than in the wake of the 2008 Euro crisis, in order to offset the impact of the Wuhan coronavirus (COVID-19) pandemic.
The 0.25-percent cut for the discount rate ended a string of 14 quarterly meetings which decided to leave interest rates unchanged, media reported. The Central Bank met as President Tsai Ing-wen (蔡英文) called for calm on the stock market and the National Stabilization Fund was reported to prepare intervention.
At the same time, the Central Bank also revised its forecast for the country’s Gross Domestic Product growth for 2020 to 1.92 percent, ending hopes that it might stay above 2 percent, CNA reported.
The bank also cut rates by the same 0.25 percent on accommodations with collateral to 1.5 percent and on accommodations without collateral to 3.375 percent.
In a news release, the Central Bank called on commercial banks not to “close their umbrellas when it started raining,” but to provide the necessary funds to viable enterprises.
The economy was feeling the effects of the coronavirus pandemic, with the manufacturing sector seeing its supply chains cut off and the local service sector falling prey to a steep fall in consumer spending.
