- Decision
- Maintain
- Rate change
- 0 bps
- discount rate
- 2%
The Central Bank of Taiwan kept its discount rate, the rate on refinancing of secured loans and the rate on temporary accommodations unchanged in its 2026 Q2 board meeting at 2%, 2.375% and 4.25%, respectively, saying a hold would help sustain sound economic and financial development as domestic inflation is projected to remain moderate and the economy to post solid growth, while uncertainty around the global outlook and the Middle East conflict could affect domestic prices and activity. Domestic demand and exports linked to artificial intelligence and other emerging technologies lifted first-quarter performance above expectations, and the central bank raised its full-year GDP growth forecast to 9.45%. For the first five months of the year, CPI inflation averaged 1.52% and core CPI 1.96%; for the year as a whole, the central bank revised its forecasts slightly higher as import prices rose and services inflation turned up, though government energy price stabilization measures were expected to limit the impact. Market rates drifted higher in recent months but liquidity remained ample, while brisk equity trading led to a sharp increase in borrowing for securities investment, prompting the central bank to urge banks to watch credit expansion and risk management. The NT dollar exchange rate is determined in principle by market forces, though the central bank said it would step in if irregular forces or seasonal factors caused excess volatility or disorderly moves. Globally, it cited Middle East supply disruptions, elevated commodity-price risks, shifting policy signals from major central banks and volatility tied to AI-related stocks as key uncertainties, and said it would adjust policy in a timely manner as warranted while continuing to review selective credit controls on real estate lending.
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.