- Decision
- Maintain
- Rate change
- 0 bps
- discount rate
- 2%
The Board of the Central Bank of the Republic of China (Taiwan) on 18 September 2025 unanimously kept the discount rate at 2.00%, with the secured-loan refinancing and temporary accommodation rates steady at 2.375% and 4.25%, judging that a hold supports “sound economic and financial development” amid projected CPI inflation below 2 % this year and solid, though moderating, growth after 6.75 % y/y GDP expansion in H1 and a full-year forecast of 4.55 %. The decision prolongs an unchanged stance that has held the policy rate at 2 % since at least March 2025. Liquidity remains ample—banks’ excess reserves averaged nearly TWD40 bn in June-August, M2 grew 4.24 % y/y and bank loans and investments 6.99 % in the first eight months—while successive selective credit curbs have cooled property markets, cutting the real-estate lending share to 36.71 % in August. Inflation averaged 1.83 % y/y in January-August; the Bank sees CPI rising 1.75 % in 2025 and easing to 1.66 % in 2026, with core inflation following a similar path as commodity and services price pressures abate. GDP growth is projected to slow to 2.51 % in H2 2025 and 2.68 % in 2026 as U.S. tariffs and a high base temper exports and investment. The Bank noted that the NT dollar remains market-driven but stands ready to curb excessive volatility, and it will monitor U.S. trade policy, global monetary divergence, China’s slowdown, geopolitical tensions and climate risks, adjusting policy “in a timely manner” if needed.
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.