FX.co ★ Taiwan Keeps Key Rate at 2% as Expected

In its September 2025 meeting, the Central Bank of Taiwan opted to keep its benchmark discount rate steady at 2%, aligning with market anticipations. This decision underscores a prudent stance amid global uncertainties such as U.S. trade policies, actions by major central banks, decelerating growth in China, and various geopolitical risks. Taiwan's economy showed strong performance in the first half of 2025, bolstered by high demand for AI and other emerging technologies, vigorous export activities, and increasing private-sector investments. Consequently, the central bank has revised its GDP forecast for 2025 upward to 4.55%. From January through August 2025, the Consumer Price Index (CPI) averaged 1.83%, driven in part by elevated food prices due to recent weather conditions. Meanwhile, the core CPI saw a rise of 1.64%. For the full year, the bank anticipates CPI and core CPI growth rates of 1.75% and 1.67%, respectively, both of which are lower than the 2024 levels of 2.18% and 1.88%. The Bank emphasized that maintaining a steady policy rate is crucial for navigating ongoing global economic uncertainties and U.S. trade policy risks, while concurrently supporting stable domestic growth and encouraging a continued easing of inflation pressures.