More on the Taiwanese central bank decision to cut main interest rate to 1.750%
It was virtually 50/50 on expectations over whether they would cut or hold at 1.875% but the central bank cut them to 1.750% stating it was to support economic growth. They added that they will maintain an orderly FX market if necessary
Speaking to our resident Taiwanese expert (reader Xin). The move is purely based on Chinese worries with China being their biggest competitor. Exporters had also been complaining about the TWD being to strong over recent years
Taiwan is also the 4th biggest US bond holder so has been wearing USD strength for a while now
Xin adds that the TWD has been pricing in a cut for sometime, losing around 5% in the last 2 weeks, and it's fallen another 1% on the announcement
USDTWD monthly
It's another sign of worry in emerging markets and follows South Africa slashing growth forecasts yesterday
