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Taiwan CB Reiterates Trust in Economy Despite COVID Cases

Taiwan’s central bank reiterated confidence in the island’s economy on Thursday, despite a spike in COVID-19 cases, although it said it would have to monitor consumption.

The government has repeatedly sought to allay fears that the outbreak of coronavirus infections will affect Taiwan’s export-dependent economy, a major global supplier of semiconductors.

Central bank governor Yang Chin-long told reporters it would have to watch how consumption did in the second and third quarters, but exports were holding up and foreign banks and economists all saw growth above 5% this year.

“It seems that everyone is still quite optimistic about Taiwan’s GDP this year,” he said.

Taiwan is in its second-highest COVID-19 alert level with gatherings of people limited and entertainment venues shut, although there has been no impact on the crucial chip sector.

Taiwan’s stock market has also largely shaken off concerns about the coronavirus impact after an initial wobble.

“Our stock market is consistent with economic fundamentals,” Yang said, noting foreign investors were not leaving Taiwan.

The central bank holds its next quarterly rate-setting meeting on June 17, but Yang would not be drawn on whether it would cut the benchmark rate.

The benchmark discount rate stands at a historic low of 1.125%, where it has been since a central bank cut in March 2020.

(Reporting by Liang-sa Loh and Ben Blanchard; Editing by Alexander Smith)

Source: Reuters

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