Taiwan set to cut rates for 4th time to shore up weak economy: poll

[TAIPEI] Taiwan's central bank will likely cut key interest rates for the fourth consecutive time when it meets on Thursday for its quarterly policy meeting, to shore up flagging growth and market confidence after Brexit.

The trade-reliant economy has been hit by falling exports and the added uncertainty of Britain's vote to exit the European Union and how the fallout trickles down to end demand are where the concerns for Taiwan are focused.

The central bank said last week that the direct negative impact of Brexit on the island was limited but Taiwan's manufacturers play a key role in the global technology supply chain and have been hit by weak demand.

The largely-symbolic discount rate - the rate at which the central bank lends to financial institutions mainly for short term purposes - will likely fall to a median 1.375 per cent from 1.5 per cent, a Reuters poll showed.

Fourteen of the 16 economists surveyed expect a cut - although one of them, Yuanta Securities expects a larger 25 basis point cut - while two forecast the central bank would stay on hold.

In late May, Taiwan cut its economic growth outlook for the third time and forecast a deeper annual contraction for exports.

REUTERS