TAIPEI — Taiwan’s central bank is likely to maintain its policy interest rate this week and keep it steady through the first quarter of next year, given the strong performance of the tech-focused economy, according to economists in a Reuters poll.
In March, the central bank left the benchmark discount rate at 2 percent, as expected, after raising it from 1.875 percent in March 2024 in anticipation of a rise in electricity prices.
At its next quarterly meeting on Thursday, it is expected to keep the rate steady, according to 29 of the 30 economists surveyed.
Economists who provided forecasts beyond this week predicted the bank will maintain its stance through the first quarter of 2026, when they forecast a rate cut to 1.875 percent.
Taiwan’s tech-centred, export-dependent economy has been supported by demand from the artificial intelligence boom, which has driven orders for companies such as TSMC, the world’s largest contract chipmaker.
“Taiwan’s economy is stable and inflation is moderate, so there is no need to cut interest rates,” said analyst Chiang Kuang-yu of Masterlink Investment Advisory.
The economy is expected to expand 3.1 percent this year due to the AI boom, the government’s statistics agency said last month, though that is slower than last year’s growth of 4.59 percent given uncertainty over US tariffs.
On inflation, Taiwan’s consumer price index (CPI) rose by a lower-than-forecast 1.55 percent in May, its lowest level in more than four years. The central bank, which considers 2 percent its “warning” line, has made easing inflation a priority.
