Taiwan eyes doubling SME funding if needed to cope with virus impact

Taiwan's central bank has pledged to double the amount of money earmarked to support small and medium-sized companies to deal with the impact of the coronavirus if needed, the head of the island's Financial Supervisory Commission (FSC) said on Monday.

The central bank last month made T$200 billion ($6.62 billion) in financing available for banks to help such businesses particularly hit by the effects of the virus, such as in tourism and transport, in the form of preferential loans. Central bank governor Yang Chin-long said last week more money would be made available if that was insufficient, though did not give details, and said he had personally spoken to banks hoping they could help.

Speaking at a news conference, the FSC's Wellington Koo said the central bank had promised it would offer another T$200 billion if the initial funding was insufficient. Taiwan has reported 373 coronavirus infections and five deaths, winning plaudits for early and effective measures, but its export-reliant economy has wilted, first as much of China was locked down then as the disease spread through Europe and the United States, crushing global demand.

The island expects to spend a total of T$1.05 trillion in stimulus measures, President Tsai Ing-wen said on Wednesday. Last month, the central bank cut its full-year growth outlook to 1.92% from a December forecast of 2.57%, though some banks expect the economy to shrink in 2020.

Yang has said there was room for more interest rate cuts, but they would not be reduced to zero or negative territory. ($1 = 30.2290 Taiwan dollars)

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