- Decision
- Maintain
- Rate change
- 0 bps
- discount rate
- 2%
The Board of the Central Bank of the Republic of China (Taiwan) left its policy corridor unchanged, holding the discount rate at 2.00%, the secured-loan refinancing rate at 2.375% and the temporary accommodation rate at 4.25%, saying disinflation is on track to bring headline CPI below 2 percent while growth is expected to remain moderate amid elevated global uncertainty linked to U.S. tariff policies. The decision extends the steady stance in place since at least March 2025, when the Board also opted for a hold at 2.00%. Market operations remain calm with excess bank reserves averaging a little above TWD45 bn between March and May and money supply (M2) and bank credit growing 4.45 percent and 7.20 percent y/y, respectively. CPI rose 2.04 percent y/y in the first five months and core CPI 1.65 percent, with full-year 2025 inflation now projected at 1.81 percent (core 1.69 percent) alongside real GDP growth of 3.05 percent. The central bank reiterated that the New Taiwan dollar is primarily market-driven but it stands ready to curb excessive volatility, and it flagged risks stemming from tariff negotiations, major-economy policy moves, China’s slowdown, geopolitics and climate events, pledging timely policy adjustments 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.