Taiwan Central Bank Holds Key Rate at 2%

Taiwan’s central bank left its key discount rate unchanged at 2% at its December 2025 meeting, in line with market expectations and extending a pause in policy since March 2024. Policymakers cited moderate inflation, with headline CPI forecast to rise 1.66% year on year and core CPI at 1.65%, both lower than in 2024 and expected to ease further to 1.63% in 2026. Economic growth has remained robust, with GDP expanding 7.18% year-on-year in the first three quarters, surpassing forecasts, and full-year growth expected at 7.31%, well above the September projection of 4.55%, supported by strong demand for emerging technologies such as AI, which has driven substantial export growth. The central bank noted ongoing global uncertainties, including potential US trade-policy shocks, slower growth in China, and geopolitical and climate risks, while Taiwanese goods remain subject to a 20% US tariff amid ongoing negotiations for a more favorable agreement.

The Central Bank of Taiwan maintained its key discount rate at 2% in its September 2025 meeting, in line with market expectations. The decision reflects a cautious approach amid global uncertainties, including US trade policy, major central bank actions, slowing growth in China, and geopolitical risks. Taiwan’s economy outperformed in H1 2025, supported by strong demand for AI and emerging technologies, robust exports, and expanding private investment. The central bank raised its GDP forecast for 2025 to 4.55%. CPI for January–August 2025 averaged 1.83%, partly due to elevated food prices amid recent weather conditions, while core CPI rose 1.64%. The central bank projects full-year CPI and core CPI growth of 1.75% and 1.67%, respectively, both below 2024 levels of 2.18% and 1.88%. The Bank emphasized that keeping the policy rate steady aims to navigate global economic uncertainties and US trade policy risks, while supporting stable domestic growth and continued moderation in inflation.

The Central Bank of Taiwan kept its key discount rate unchanged at 2% during its June 2025 meeting, in line with market expectations. The decision reflects ongoing global economic uncertainties, a stable domestic outlook, and continued easing of inflationary pressures. Taiwan’s economy outperformed expectations in the first half of 2025, supported by strong global demand for emerging technologies and early inventory stocking by foreign firms in anticipation of potential US tariff hikes. The central bank maintained its GDP growth forecast at 3.05% for 2025. Meanwhile, the inflation rate from January to May 2025 rose at an average annual rate of 2.04%, while core CPI increased by 1.65%. The central bank projects full-year CPI and core CPI growth at 1.81% and 1.69%, respectively—both lower than the 2024 figures of 2.18% and 1.88%. The Bank cautioned that inflation risks remain, citing commodity price swings, domestic service costs, and unpredictable weather as potential pressures.