TAIPEI (Taiwan News) — Taiwan’s Central Bank left interest rates unchanged after a board meeting on Thursday, citing moderate economic growth internationally and uncertainties over US trade policy.
The Central Bank said its directors unanimously decided to leave the benchmark discount rate at 2%. The decision marks the fourth consecutive quarter the bank left interest rates unchanged.
The bank’s decision came after Japan, and Hong Kong followed the US and left Central Bank rates unchanged yesterday. Taiwan’s decision was in line with the expectation of 33 economists polled by Reuters.
In a statement, Taiwan’s Central Bank said there are many economic risks ahead, including US economic and trade policies. “The bank’s board believes keeping interest rates unchanged at this time will help maintain stable economic and financial development,” it said.
The bank slightly lowered its 2025 economic growth estimate from 3.13% to 3.05%. It said this forecast was based on expected AI and technology export growth, minimum wage and public employee salary increases, and moderate domestic consumption growth.
The bank said Taiwan’s exports have grown steadily in recent months. It added domestic demand has been driven partly by demand from semiconductor manufacturers and consumption growth.
The bank said inflation continued a “slow downward trend” in the first two months of this year. It said headline inflation rose 2.12% in that period and core inflation increased by 1.61% compared to the same period last year.
The bank said that due to possible railway ticket and utility price increases, it revised headline inflation expectations upward to around 2% for 2025. However, it expects the core inflation to be less than last year at 1.88%.
Headline inflation refers to the overall price level in an economy, including items with less stable prices like energy and food. Core inflation excludes these things in an attempt to show underlying inflation over longer periods.
The bank declined to place further controls on the home loan market at the meeting. It said credit control measures were adjusted for a seventh time in September, decreasing the number of property loans.
The annual growth rates for residential home and developer loans have slowed, the bank said. It added that the ratio of property loans to total loans was 37.1% at the end of February.
