Central Bank leaves rates unchanged in June

Latest bank decision: At its meeting on 19 June, Taiwan’s Central Bank decided to keep the discount rate unchanged at 2.00%.

Monetary policy drivers: Rate cuts were not warranted, given that the economy is performing well as the export sector rides the global AI boom. On the flipside, rate hikes were unnecessary given that inflation has been moderate at 2.0% on average so far this year and is on track to drop below 2.0% going forward according to the Bank. Elevated uncertainty over U.S. trade policy was another reason to stay on hold.

No major deviations in monetary policy expected: The Central Bank did not provide specific forward guidance on the future direction of interest rates. Our panelists are roughly split on the outlook for this year: Around half the panel sees rates on hold and the other half expects only mild monetary easing.

How should you choose a forecaster if some are too optimistic while others are too pessimistic? FocusEconomics collects Taiwanese interest rate projections for the next ten years from a panel of 17 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts and averaged to provide one Consensus Forecast you can rely on for each indicator. By averaging all forecasts, upside and downside forecasting errors tend to cancel each other out, leading to the most reliable interest rate forecast available for Taiwanese interest rate.

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