Bank of Taiwan (台灣銀行), the largest lender in the country, is to raise the benchmark one-year time savings deposit rate to a 15-year-high 1.715 percent from tomorrow following a surprise central bank rate hike.
The increase reflected a 12.5 basis-point key interest rate increase instituted by the central bank on Friday, Bank of Taiwan said.
The state-owned lender is also to raise its two-year time savings deposit rate and three-year time savings deposit rate by 0.125 percentage points to 1.750 percent and 1.785 percent respectively.
Photo: Lu Kuan-cheng, Taipei Times
Under the new rates, one-year time savings depositors who have NT$1 million (US$31,291) in their accounts would receive more than NT$17,280 in annual interest payments, up from NT$16,020, based on compound-rate calculations, Bank of Taiwan said.
On Thursday, the central bank said it would raise key interest rates the next day in light of higher Taiwan Power Co (台電) electricity rates effective from April 1.
After the central bank’s latest rate hike, Taiwan’s benchmark discount rate has increased to 2 percent.
The central bank said it has revised consumer price index growth to 2.16 percent for this year, above the 2 percent alert level it set as well as an earlier 1.89 percent forecast in December last year, prompting it to raise rates for the first time since March 2022.
The central bank’s decision came as a surprise after the US Federal Reserve on Wednesday left interest rates unchanged.
With the changes, Taiwan’s rate on accommodations with collateral has risen to 2.375 percent, while accommodations without collateral increased to 4.25 percent, the central bank said.
From March 2022 to March last year, the central bank raised interest rates 75 basis points, which led Bank of Taiwan’s one-year time savings deposit rate to increase to 1.59 percent from 0.84 percent.
Bank of Taiwan had also increased interest payments on deposits of NT$1 million to almost NT$16,020 from about NT$8,340 a year, based on compound rate calculations, during the same period.
Taiwan is projected to lose a working-age population of about 6.67 million people in two waves of retirement in the coming years, as the nation confronts accelerating demographic decline and a shortage of younger workers to take their place, the Ministry of the Interior said. Taiwan experienced its largest baby boom between 1958 and 1966, when the population grew by 3.78 million, followed by a second surge of 2.89 million between 1976 and 1982, ministry data showed. In 2023, the first of those baby boom generations — those born in the late 1950s and early 1960s — began to enter retirement, triggering
ECONOMIC BOOST: Should the more than 23 million people eligible for the NT$10,000 handouts spend them the same way as in 2023, GDP could rise 0.5 percent, an official said Universal cash handouts of NT$10,000 (US$330) are to be disbursed late next month at the earliest — including to permanent residents and foreign residents married to Taiwanese — pending legislative approval, the Ministry of Finance said yesterday. The Executive Yuan yesterday approved the Special Act for Strengthening Economic, Social and National Security Resilience in Response to International Circumstances (因應國際情勢強化經濟社會及民生國安韌性特別條例). The NT$550 billion special budget includes NT$236 billion for the cash handouts, plus an additional NT$20 billion set aside as reserve funds, expected to be used to support industries. Handouts might begin one month after the bill is promulgated and would be completed within
NO CHANGE: The TRA makes clear that the US does not consider the status of Taiwan to have been determined by WWII-era documents, a former AIT deputy director said The American Institute in Taiwan’s (AIT) comments that World War-II era documents do not determine Taiwan’s political status accurately conveyed the US’ stance, the US Department of State said. An AIT spokesperson on Saturday said that a Chinese official mischaracterized World War II-era documents as stating that Taiwan was ceded to the China. The remarks from the US’ de facto embassy in Taiwan drew criticism from the Ma Ying-jeou Foundation, whose director said the comments put Taiwan in danger. The Chinese-language United Daily News yesterday reported that a US State Department spokesperson confirmed the AIT’s position. They added that the US would continue to
IMPORTANT BACKER: China seeks to expel US influence from the Indo-Pacific region and supplant Washington as the global leader, MAC Minister Chiu Chui-cheng said China is preparing for war to seize Taiwan, Mainland Affairs Council (MAC) Minister Chiu Chui-cheng (邱垂正) said in Washington on Friday, warning that Taiwan’s fall would trigger a regional “domino effect” endangering US security. In a speech titled “Maintaining the Peaceful and Stable Status Quo Across the Taiwan Strait is in Line with the Shared Interests of Taiwan and the United States,” Chiu said Taiwan’s strategic importance is “closely tied” to US interests. Geopolitically, Taiwan sits in a “core position” in the first island chain — an arc stretching from Japan, through Taiwan and the Philippines, to Borneo, which is shared by