December 17, 2018 / 5:08 AM / a month ago

Taiwan seen leaving rates unchanged as trade war concerns remain: Reuters Poll

A Taiwan dollar note is seen in this illustration photo May 31, 2017. REUTERS/Thomas White/Illustration

TAIPEI (Reuters) - Taiwan’s central bank is expected to leave its policy rate steady for the tenth straight quarter on Thursday, a Reuters poll of analysts showed, amid worries that global trade frictions could hurt the export-reliant economy.

Sixteen of 17 economists polled said they expected the central bank to leave the benchmark discount rate TWINTR=ECI at 1.375 percent when its policy board meets this week. One analyst predicted a 12.5 basis point rise to 1.5 percent.

Taiwan’s economy has been largely resilient to the trade tensions between China and the United States, but there were signs that the island’s economy could face a slowdown in the coming months amid concerns of tariff increases.

The island’s exports in November unexpectedly posted their steepest drop since 2016 due to tepid demand for Taiwan’s technology exports.

“Taiwan’s economy has been impacted by the trade war,” said Taipei-based Cathay Financial Holdings economist Aidan Wang, citing slowing export demands and sluggish outlook from traders.

“The policy rate is likely to be kept at the current level.”

Higher interest rates could also lift the Taiwan dollar, hurting the island’s export competitiveness.

Poll compiled by Carol Lee; Reporting by Yimou Lee; Editing by Gopakumar Warrier

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