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Taiwan: 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.
