Taiwan Monetary Policy March 2021


Taiwan: Central Bank holds policy stable in March amid improving economic backdrop

March 18, 2021

At its monetary policy meeting on 18 March, the Board of Directors of Taiwan’s Central Bank kept rates unchanged, with the discount rate set at the record low of 1.125%.

The Bank’s decision was underpinned on one hand by a strong economy, amid surging foreign demand for Taiwanese goods and encouraging signs regarding domestic demand, which meant that further stimulus was not warranted. However, given price pressures are still muted and there is still some uncertainty surrounding the global economic outlook, the Bank judged it was also premature to begin reducing monetary stimulus.

In its communiqué, the Bank adopted a neutral tone, and did not give explicit forward guidance on the future direction of rates. Given the economy is performing well, our panelists do not see further rate cuts ahead, although most see rates remaining at their current level until 2023 in order to solidify price pressures.

FocusEconomics Consensus Forecast panelists see the policy rate ending 2021 at 1.13% and 2022 at 1.18%.

Author:, Economist

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Taiwan Monetary Policy Chart

Taiwan Monetary Policy March 2021 0

Note: Central Bank Discount Rate in %.
Source: Central Bank of the Republic of China (Taiwan).

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