Cityscape at night in Taiwan

Taiwan Monetary Policy September 2019

Taiwan: Central Bank stands pat again in September

At its monetary policy meeting on 19 September, the Board of Directors of Taiwan’s Central Bank unanimously decided to leave the discount rate unchanged at 1.375%, as expected by most market analysts. The discount rate has been at this level since June 2016.

Rising uncertainty, particularly caused by the U.S.-China trade conflict and which the Board noted is likely to linger into next year, has weighed on the economy in recent months. That said, the Board still projects economic growth of 2.4% and 2.3% for 2019 and 2020, respectively, both of which are above our forecasts. Meanwhile, inflation has been modest so far this year, and the Board announced it expects inflation to average 0.7% over the year as a whole before accelerating to 0.9% next year, partly thanks to next year’s minimum wage hike.

In sum, the Board did not feel pressured to cut rates further at its latest monetary policy meeting as it forecasts robust economic growth; accelerating, albeit still very low, inflation in the coming months; and given that the deposit rate is already at the second-lowest level since the 1970s. Rather, the Board judged that “a continued accommodative monetary policy stance will help ensure price stability and foster sound development of the economy and the financial sector.” Going forward, most of our panelists see the deposit rate remaining unchanged through to 2021, although a small number of panelists do see a cut within that time period.

Free sample report

Access essential information in the shortest time possible. FocusEconomics provide hundreds of consensus forecast reports from the most reputable economic research authorities in the world.
Close Left Media Arrows Left Media Circles Right Media Arrows Right Media Circles Arrow Quote Wave Address Email Telephone Man in front of screen with line chart Document with bar chart and magnifying glass Application window with bar chart Target with arrow Line Chart Stopwatch Globe with arrows Document with bar chart in front of screen Bar chart with magnifying glass and dollar sign Lightbulb Document with bookmark Laptop with download icon Calendar Icon Nav Menu Arrow Arrow Right Long Icon Arrow Right Icon Chevron Right Icon Chevron Left Icon Briefcase Icon Linkedin In Icon Full Linkedin Icon Filter Facebook Linkedin Twitter Pinterest