Taiwan Central Bank’s Two-Year CD Rate Rebounds to 1.249%, Ending Nine-Auction Slide

Taiwan’s central bank uses certificates of deposit auctions to manage liquidity in the financial system, while the yield on its two-year CDs reflects banks’ expectations for medium-term funding costs and interest rates. The rebound after nine consecutive declines indicates that liquidity remained relatively tight following the Lunar New Year holiday, prompting financial institutions to take a more cautious approach to bidding.

On the 25th, the central bank auctioned NT$25 billion of two-year CDs. The weighted average successful bid rate rebounded from the previous auction’s low to 1.249%, ending nine straight declines. With funds yet to fully return to the market after the holiday and investors awaiting clarity on the U.S. Federal Reserve’s pace of interest-rate cuts, the bid-to-cover ratio fell to 3.07, its lowest in nearly 11 months.