Taiwan Central Bank Cuts Certificate Issuance to Release Liquidity; Outstanding Balance Hits 10-Month Low

Taiwan’s central bank issues certificates of deposit to absorb excess funds from the financial system, with the outstanding balance serving as an indicator of market liquidity conditions. As cash demand from businesses and the public increased around the Lunar New Year holiday, the central bank adjusted its open-market operations in February and reduced certificate issuance. The move kept more funds in the banking system to support both financial stability and economic growth.

The central bank reduced its issuance of certificates of deposit by more than NT$60 billion in February to meet funding demand during the Lunar New Year period. Outstanding certificates fell to NT$7.24 trillion at the end of February, the lowest level in 10 months. The market expects the central bank to keep its policy rate unchanged this year, though it may continue adjusting certificate issuance flexibly to maintain relatively loose liquidity conditions.