On April 30th, the Central Bank of Taiwan issued a press release stating that Moody’s has maintained Taiwan’s sovereign credit rating at Aa3 with a stable outlook. Moody’s affirmed the central bank’s monetary policy performance but also acknowledged that the cross-strait tensions would be a long-term constraint on credit.
According to Moody’s latest report on Taiwan’s sovereign rating for 2024, the long-term credit rating remains at “Aa3” with a “stable” outlook maintained for the future.
The Taiwan Central Bank stated that this rating and outlook reflect Taiwan’s high income and wealth levels, robust institutional framework, and external position. Furthermore, Taiwan’s leadership in advanced semiconductor technology and widespread application, along with its technology-driven manufacturing sector, underpin the economy’s high resilience and competitiveness.
The report pointed out that Taiwan’s fiscal and monetary policies have maintained institutional effectiveness over the long term. Effective and credible monetary and macroeconomic policies have helped withstand external pressures such as global price increases, weakening external demand, and rising global interest rates.
Moody’s praised the central bank’s monetary policy performance, noting that tightening monetary policy has restrained broad money growth, keeping Taiwan’s inflation rate stable between 2% to 3%. The central bank’s ample foreign assets have contributed to maintaining order in the foreign exchange market and preserving financial market stability.
However, Moody’s anticipates that the geopolitical risks stemming from the tense cross-strait relations will remain a long-term constraint on credit. Rapid population aging poses challenges for long-term economic growth and fiscal sustainability.
In addition, in terms of Environmental, Social, and Governance (ESG) considerations, Moody’s awarded Taiwan the highest governance rating of G-1, reflecting Taiwan’s strong institutional framework and government governance.
This article was sourced from Central News Agency.