Modest Rate Rise Ahead

September 2004 | Market Strategy

As the Central Bank of China (CBC, Taiwan's monetary authority) prepares to hold its quarterly monetary policy committee meeting on September 30, mixed signals have emerged as to whether or by how much it will raise its discount rate from a record low of 1.375%. Interest rates were cut to this level in June 2003, in order to kickstart the economy, after it was hit by the SARS crisis. BMI believes that there is room for modest rate hikes, and forecasts a discount rate of 1.75% by the end of this year.

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