CBC discussed the impact of rate cuts in 2Q19 Director Conference

Central Bank of the Republic of China (CBC) announced 2Q19 Director Conference Record today on August 1st. All the directors agreed to maintain the interest rate unchanged. However, in the record, many directors have raised the issue of the effectiveness of monetary policy after interest rate cuts. One of the directors pointed out that the Bank of Japan (BoJ) has maintained quantitative easing (QE) monetary policy for nearly 30 years, but the economy has not improved. He emphasized that policy space should be reserved. However, due to current international uncertainties, there may be no room for appreciation.

In the record, all the directors agreed to maintain the interest rate unchanged mainly due to the followings: a) high uncertainty of global economic and trade outlook, b) the slowdown of Taiwan’s economic growth momentum, c) stable inflation outlook.