Taiwan Keeps Key Rate at 2% as Expected

The Central Bank of Taiwan maintained its key discount rate at 2% in its September 2025 meeting, in line with market expectations. The decision reflects a cautious approach amid global uncertainties, including US trade policy, major central bank actions, slowing growth in China, and geopolitical risks. Taiwan’s economy outperformed in H1 2025, supported by strong demand for AI and emerging technologies, robust exports, and expanding private investment. The central bank raised its GDP forecast for 2025 to 4.55%. CPI for January–August 2025 averaged 1.83%, partly due to elevated food prices amid recent weather conditions, while core CPI rose 1.64%. The central bank projects full-year CPI and core CPI growth of 1.75% and 1.67%, respectively, both below 2024 levels of 2.18% and 1.88%. The Bank emphasized that keeping the policy rate steady aims to navigate global economic uncertainties and US trade policy risks, while supporting stable domestic growth and continued moderation in inflation.