Taiwanese Banks Hike Interest Rates for U.S. Dollar Deposits

Taipei, May 15, 2006 (CENS)—In line with the recent move of the U.S. Federal Reserve Board (Fed) to raise its key interest rates by 0.25 of a percentage point, Taiwan' s leading foreign exchange banks have followed suit by hiking their interest rates for U.S. dollar deposits as well.

Of them, the Bank of Taiwan (BOT) has raised its interest rates by 0.25 of a percentage point to 5% per annum for one-year U.S. dollar deposits, the highest among its counterparts and about 2.94 percentage points higher than the corresponding figure of 2.06% for New Taiwan dollar deposits.

Meanwhile, the Land Bank of Taiwan, Taiwan Cooperative Bank, and the three government-link banks—First Commercial Bank, Hua Nan Commercial Bank, and Chang Hwa Commercial Bank hiked their U.S. dollar deposit rates by 0.1 of a percentage point. The International Commercial Bank of China (ICBC) raised the interest rate by merely 0.05 of a percentage point.

Some banking executives indicated that there is still room for the N.T. dollar to further appreciate against the U.S. dollar since international equity funds keep flooding into Asia. They expected the exchange rate between the two currencies to reach NT$31:US$1 soon.

Interest rates for U.S. dollar deposits offered by leading domestic banks Unit: %
Time/Bank	BOT	Land Bank, Taiwan Cooperative, First, Hua Nan, & Chang Hwa	ICBC
One month	4.5	4.5	4.5
Three months	4.65	4.6	4.6
Six months	4.8	4.7	4.7
Nine months	4.95	4.8	4.75
One year	5	4.85	4.8

Sources: The above-mentioned banks