Four major domestic banks announced a cut in interest rates on Friday by as much as 0.45 percent, bringing the rate for deposit accounts to a record low of 0.7 percent.
The lower rates took effect immediately at Hua Nan Commercial Bank (華南銀行), Chang Hwa Commercial Bank (彰化銀行) and the Taiwan Business Bank (台灣中小企銀), while the Bank of Taiwan (台銀) will post its new rates tomorrow.
The four banks' move to cut interest rates is expected to be followed by other commercial banks, including the First Commercial Bank (
"The interest rate cut is a result of excess money supply," Land Bank of Taiwan chairman Wei Chi-lin (魏啟林) said yesterday.
"There have been tens of billions of NT dollars [in excess money supply] over the past two weeks," Wei said.
The interest rates for saving accounts will be 0.9 percent at the Bank of Taiwan and the Taiwan Business Bank, and 0.7 percent at Hua Nan Commercial Bank, Chang Hwa Commercial Bank and First Commercial Bank.
The interest rates range from 1.525 percent to 1.572 percent for one-year term deposits, 1.6 percent to 1.65 percent for two-year term deposits and 1.625 percent to 1.75 percent for three-year term deposits.
Market watchers expect another round of rate cuts after the Lunar New Year holiday because the money supply usually increases at that time of the year.
But Wei said it's still too early to tell, adding that the central bank is accustomed to moderating the nation's cash flow and tightening the money supply after the holiday. If the central bank's measures are effective, there may be no need for further rate cuts, Wei said.
RSS