Taiwan’s central bank cuts short-term debt sales to boost liquidity

Taiwan’s Central Bank of the Republic of China (CBC) is pulling back on one of its favorite tools for soaking up excess cash, and the numbers are substantial. The outstanding balance of the bank’s negotiable certificates of deposit (CDs) dropped to NT$5.8604 trillion as of September 22, 2026, down from a peak of NT$7.42 trillion at the end of 2025. That’s a decline of roughly NT$1.56 trillion in less than nine months. What the CBC actually did CDs issued by the CBC function as a liquidity management tool: when the central bank sells them, it pulls cash out of the financial system. When it reduces issuance or lets them mature without replacement, cash stays in banks’ hands. In June 2026, the CBC cut its monthly auction size for 364-day CDs from NT$140 billion to NT$120 billion, effective July 2026. That was the first reduction in four years. Auctions for two-year CDs stayed steady at NT$25 billion per month. On a single day, September 22, the outstanding CD balance fell by NT$1.501 billion. For the month through that date, cumulative reductions reached NT$6.7747 billion. This isn’t a rate cut in disguise. The CBC has held its policy rates unchanged, with the discount rate at 2%, sec...