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Taiwan central bank may cut discount rate for first time since 2009

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Pedestrians walk past stores in the shopping district of Ximending in Taipei, Taiwan, on Monday, on Dec 8, 2014. Taiwan's central bank may cut its policy interest rate for the first time since 2009 next week, as China's slowdown and weak global demand dampen the island's tech exports and economic growth outlook.

[TAIPEI] Taiwan's central bank may cut its policy interest rate for the first time since 2009 next week, as China's slowdown and weak global demand dampen the island's tech exports and economic growth outlook.

Following the Federal Reserve's decision to hold off on raising interest rates on Thursday, SinoPac Securities in Taiwan said it expected the island's benchmark discount rate to be cut to 1.75 per cent due to concerns about the global economy. The firm had earlier cited no change to rates.

Taiwan's central bank holds its next quarterly meeting on Thursday, Sept 24 under pressure to ease policy as demand for Taiwan's tech shipments falter and growth has dropped to a six-year low.

Eight economists out of 14 re-polled by Reuters believe the central bank will trim its benchmark interest rate, a big change from three months ago when no move on rates was anticipated. The rest said they saw no change.

In the earlier poll published on Sept 16, economists were evenly split on their outlook.

The central bank has kept the discount rate, a policy interest rate, at 1.875 per cent since the last hike in 2011.

REUTERS