Several state-run banks, including the Bank of Taiwan (BOT, 臺灣銀行), the Land Bank of Taiwan (土地銀行), Chang Hwa Commercial Bank (彰化銀行) and Taiwan Cooperative Bank (合作金庫銀行), will raise interest rates on Wednesday after the central bank increased its policy rates last week.
Other major state-run commercial lenders and Chunghwa Post Co (中華郵政), which also provides financial services such as deposit banking and life insurance, are expected to follow suit this week.
BOT said in a statement on Friday it would raise interest rates on various time deposits and time savings deposits by between 0.07 percentage points and 0.09 percentage points in response to the central bank’s hikes of 0.125 percentage points in its key interest rates, beginning on Friday.
The nation’s largest state-run bank will also increase the interest rates for passbook savings accounts by 0.03 percentage points, the statement said.
Land Bank said in a separate statement on Friday that in order to reflect the market’s funding conditions and competition, it will increase the interest rates of various time deposits and time savings deposits by between 0.07 percentage points and 0.09 percentage points.
Land Bank said it would also raise the interest rates for various passbook accounts and passbook savings accounts by 0.03 percentage points.
The central bank has increased its key interest rates for four consecutive quarters, by 12.5 basis points each time, as it seeks to normalize interest rates and curb rising asset prices.
Looking ahead, economists at Citibank and HSBC said last week they expected the central bank to maintain a hike of 12.5 basis points on its key interest rates in each quarter this year. However, Goldman Sachs said rising inflationary pressure triggered by import prices would prompt the central bank to accelerate rate hikes by the end of the year.
Goldman Sachs said in a report on Friday that the central bank might increase its key rates by 12.5 basis points in the next two quarters and 25 basis points in the final quarter.
The Directorate-General of Budget, Accounting and Statistics is scheduled to release last month's inflation data on Wednesday. The consumer price index is expected to have risen 1.7 percent year-on-year last month, according to a median forecast of 11 economists by Dow Jones Newswires, after the inflation index rose 1.33 percent in February and 1.1 percent in January.
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