Why Taiwan must watch out for macro data beyond February

Its policy rate is predicted to stand pat 1.875%.

According to DBS, Taiwan’s central bank (CBC) is expected to hold the policy rate steady at 1.875% tomorrow.

The seasonal impact on recent economic data was large – exports and industrial production fell sharply in February due to fewer working days, retail sales rose on festive demand, and inflation and money supply both accelerated. 

Here's more from DBS:

In spite of the seasonal volatility, the CBC is likely to maintain the view that the economy is on track to a modest recovery and inflation pressures will remain tame at the early phase of recovery.

The macro data beyond February will be closely watched. As a positive sign, the preliminary March PMI picked up both in China and US (Taiwan’s two major export markets), which points to the possibility that Taiwan’s export and production figures may have also rebounded in March.