Taiwan c. bank to hold rates steady – poll

Taiwan’s central bank is expected to maintain its current policy interest rate this week and is likely continue to do so until late next year due to ongoing inflation worries, according to economists in a Reuters poll.

The bank kept the benchmark discount rate at two per cent during its last meeting in June, following a previous increase from 1.875 per cent in March in anticipation of higher electricity prices.

A unanimous forecast from the 32 economists surveyed suggests the central bank will keep the rate on hold during its upcoming meeting on Thursday.

Those who provided insights beyond this week predicted the first rate cut to occur only in the third quarter of 2025, with the median estimate projecting a reduction to 1.875 per cent.

Taiwan’s inflation, though not as high as in major Western economies, remains a priority for the central bank. While the August Consumer Price Index (CPI) rose above expectations to 2.36 per cent, it still sits below the central bank’s “warning line” of two per cent.

Hsu Chih-yen of MasterLink Securities believes holding steady is the most likely outcome given current inflation levels. He emphasised that Taiwan’s central bank won’t necessarily follow the expected rate cut by the US Federal Reserve this week.

Attribution: Reuters

Subediting: M. S. Salama