FX.co ★ Taiwan Holds Rates Steady as Expected

In its meeting held in June 2025, the Central Bank of Taiwan opted to maintain the key discount rate at 2%, aligning with market forecasts. This decision accounts for prevailing global economic uncertainties, a steady domestic economic outlook, and a reduction in inflationary pressure. Taiwan's economy has exceeded expectations in the first half of 2025, fueled by robust global demand for emerging technologies and proactive inventory stocking by international firms in anticipation of possible US tariff increases. The central bank has upheld its GDP growth projection for 2025 at 3.05%. From January to May 2025, the inflation rate saw an average annual increase of 2.04%, with the core Consumer Price Index (CPI) climbing 1.65%. The central bank anticipates full-year growth figures for CPI and core CPI to be 1.81% and 1.69%, respectively, which are lower compared to the 2024 rates of 2.18% and 1.88%. However, the Bank has warned of persistent inflation risks, influenced by fluctuations in commodity prices, domestic service costs, and variable weather conditions.