The central bank says the lending rate has been cut by a quarter of a percentage point to 3.125 per cent. The rate has been cut a total of 0.875 of a point in two months.

The rate cut is expected to boost the domestic economy as slowing demand from abroad has led to declines in Taiwan's exports for two consecutive months, according to a statement on the bank's website.

Taiwanese exports fell 8.3 per cent in October from a year earlier. -- AP