Taiwan Central Bank Holds Key Rate At 2.0%

(RTTNews) - Taiwan's central bank retained its key interest rate at its June meeting on Thursday as the policy board observed that the current rate level would help sustain sound economic and financial development on the whole.

The central bank board unanimously decided to maintain the key discount rate at 2.0 percent.

In addition, the rate on refinancing of secured loans and the rate on temporary accommodations are unchanged at 2.375 percent and 4.25 percent, respectively.

Taiwan's economic growth improved much more strongly than expected this year so far amid significant expansion in exports and private investment and consumption.

The bank observed that the strong export growth was driven by more demand for artificial intelligence and other emerging technology applications, as well as front-loading by overseas firms in response to U.S. tariff policies.

The bank forecast Taiwan's economy to expand by 3.05 percent this year, the same as the previous forecast.

Recent official data showed that consumer price inflation in Taiwan eased to a more than 4-year low of 1.55 percent in May from 2.03 percent in April.

Regarding the inflation outlook for the second half of 2025, inflationary pressures are expected to soften further as services inflation will likely maintain a gradual downtrend, and international crude oil prices this year are expected to come below the levels of last year.

Therefore, the central bank revised down its forecasts for the CPI and the core CPI annual growth rates to 1.81 percent and 1.69 percent in 2025, respectively, lower than the 2024 figures of 2.18 percent and 1.88 percent.

Policymakers will closely monitor global uncertainty factors, including U.S. tariff policy developments, the pace of monetary policy adjustments by major central banks, China's economic downturn risk, geopolitical conflicts, and extreme weather, and their implications for Taiwan's economic activity, financial conditions, and price trends, the bank added.