Anticipation of an interest rate cut in the US, which was delivered on Wednesday, has led many in Taiwan to expect the central bank to follow with its own reduction. Looking ahead, Taiwan's exporters will not see significant growth.
Analysts say the rate cut comes just in time, as there's an economic storm brewing on the horizon.
But the fate of Taiwan's economy may depend on how the US responds to its series of recent rate cuts. And lower interest rates may not hurt the New Taiwan dollar much as long as the cuts help bolster investor confidence. He was referring to the fact that lower interest rates, in theory, weaken the currency. The central bank should let the NT dollar depreciate to stimulate exports while at the same time lowering interest rates to help push the economy forward, he said. The recent strength in the NT dollar may be related to the huge inflow of foreign funds into Taiwan's stock market.