ANZ cuts Taiwan forecast
Australia and New Zealand Banking Group Ltd (ANZ) has slashed its forecast for the nation’s GDP growth after last month’s exports failed to impress. The bank is now projecting full-year economic growth at 2.36 percent, down from an earlier forecast of 3.56 percent, after the government announced on Friday that exports grew 0.9 percent year-on-year to US$26.34 billion last month. “The underperformance of Taiwan’s trade in the first five months fell short of our expectations,” ANZ senior economist Raymond Yeung (楊宇霆) wrote in a research note. “The soft patch will likely extend over the next few months and continue to hinder an economic recovery.”
NCD interest rate down
The weighted average interest rate in the latest auction of 364-day negotiable certificates of deposit (NCDs) by the central bank continued to trend lower as the local market remained awash in liquidity, dealers said on Saturday. In the latest NCD auction by the central bank on Friday, to sell NT$100 billion (US$3.34 billion) of 364-day NCDs, the weighted average interest rate fell to 0.635 percent from 0.657 percent recorded in the previous sale. Local financial institutions participating in Friday’s auction offered a total of NT$302 billion worth of funds to bid for the NT$100 billion NCDs, slightly down from the NT$303.5 billion bidders put up during the previous NCD sale. However, dealers said demand for NCDs remained solid and the large funds the bidders prepared for the auction was further evidence that the market was full of idle money. The bank has sold 364-day NCDs to absorb excess funds from the market since April 2010.