- Decision
- Maintain
- Rate change
- 0 bps
- discount rate
- 2%
The Board of the Central Bank of the Republic of China (Taiwan) unanimously left its policy rates unchanged, keeping the discount rate at 2.00%, the secured-loan refinancing rate at 2.375% and the temporary accommodation rate at 4.25%, judging a hold appropriate as domestic inflation is projected to ease to about 2 % this year while softer global growth and policy uncertainty could weigh on activity. Market liquidity remains ample—banks’ excess reserves averaged above TWD 57 bn and M2 grew 5.36 % y/y in January–February—supporting the Bank’s forecast for 2025 GDP growth of 3.05 %. CPI inflation averaged 2.12 % y/y (core 1.61 %) in the first two months, and the Bank sees full-year CPI and core CPI at 1.89 % and 1.79 %, respectively, with a possible uptick to around 2 % if utility tariffs rise. It highlighted that selective credit curbs have slowed housing and construction loan growth, cutting the real-estate loan share to 37.1 % of total lending by February; quarterly reviews and targeted examinations will continue. Externally, the Bank noted a softer USD and higher global market volatility amid shifting US trade policies, China’s slowdown and geopolitical tensions, and reiterated it will intervene only to counter disorderly NT dollar moves. It pledged to stay alert to domestic inflation trends and global uncertainties and to adjust monetary settings in a timely manner to safeguard price and financial stability.
Rate evolution
From June 2025 through September 2026, the Central Bank of the Republic of China (Taiwan) kept its policy rates unchanged, leaving the discount rate at 2% throughout as it maintained a cautious hold amid contained inflation and solid domestic growth. Across the period, the Board cited gradual disinflation, mild inflationary pressures and ample liquidity, while noting that strong demand for artificial intelligence and other emerging technology applications, earlier tariff-related front-loading, and later a pickup in private consumption supported exports and investment.
Its risk framing centred on uncertainty over U.S. tariff policy, China’s slowdown risk, major central bank actions, geopolitical conflicts and weather, with uncertainty easing somewhat by September 2025 before broadening again by December. In March 2026, despite revising inflation forecasts higher after the Middle East conflict lifted oil and commodity prices, the Bank again held rates, judging inflation still moderate and growth solid on AI-led exports, investment and firmer consumption. In the second quarter of 2026, it left the discount rate, the rate on refinancing of secured loans and the rate on temporary accommodations unchanged at 2%, 2.375% and 4.25%, respectively, even as it raised its GDP growth forecast to 9.45% and nudged up its CPI and core CPI forecasts to 1.91% and 1.90%, saying a prudent hold would support sound economic and financial development. In September 2026, the Board kept all three rates at those levels, judging inflation would remain contained and ease below 2% in 2027 while growth stayed solid, even as it raised its 2026 GDP growth forecast to 11.48% on sustained AI-related demand and lifted its CPI and core CPI forecasts to 2.03% and 2.16% given elevated oil prices and persistent services inflation.