ETF Trends
ETF Trends

Both Taiwan and South Korea are seeing cuts in their key interest rates, in hopes of jump-starting their economies and exchange traded funds (ETFs).

Taiwan’s central bank on Sunday cut its key interest rate for the fourth time in less than eight weeks after the island posted its biggest decline in exports in nearly four years, report Perris Lee Choon Siong and Evan Ramstad for The Wall Street Journal.

This move came a few days after South Korea cut their interest rate; both countries did so by one-quarter of a percent. Growth forecasts are bleak and trade numbers are decreasing, which is bad news for both of these economies.  Exports account for about half of South Korea’s economic output.

Correlations between the world economies and South Korea and Taiwan have increased, meaning that the impact of the global slowdown on these and other economies could continue to be strong. Increasing internal demand through government initiatives will help boost consumption and in turn elevate external demand – at least, that’s the plan.

  • iShares MSCI South Korea (EWY), down 56.7% year-to-date

  • iShares MSCI Taiwan Index (EWT), down 44.6% year-to-date

Taiwan ETF

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.