Divisia Monetary Aggregates for Taiwan

  • Yen Chrystal Shih


Taiwan has implemented major financial liberalisation measures since the late 1980s. In July 1987, trade-related foreign exchange controls were abolished and capital-flow-related foreign exchange controls greatly relaxed. The entry of new securities firms was permitted in January 1988, with the result that the number of securities firms increased from 60 to 150 within the first year. The limit on daily fluctuations in stock prices was raised from 3 to 5 per cent in 1988 and to 7 per cent in the following year. In December 1990, foreign institutional investors were allowed to invest directly in the local stock market. In respect of the banking sector, a revised Banking Law was promulgated in September 1989, leading to bank interest rates on deposits and loans being completely liberalised, and new private commercial banks were allowed to be established. As of the end of 1993, sixteen new private banks had begun operating.


Interest Rate Central Bank Money Demand Monetary Aggregate Treasury Bill 
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© Palgrave Macmillan, a division of Macmillan Publishers Limited 2000

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  • Yen Chrystal Shih

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