Taiwan's central bank has decided to maintain its benchmark interest rate at 2%, opting against cuts through early 2026. This decision comes amid a boom in tech-driven exports and stable economic indicators.
Introduction
Taiwan's central bank has announced its decision to keep the benchmark interest rate at 2%, shying away from rate cuts in the near future. This decision is based on the sustained growth of high-tech industries and positive economic indicators.
Economic Forecasts and Tariff Impact
According to a survey of 30 economists, 29 predicted that the central bank would maintain rates at its next meeting on June 19. Forecasts suggest that amid an AI boom, Taiwan's economy will grow by 3.1% in 2023, lower than the 4.59% expansion in the previous year due to uncertainty surrounding US tariffs. The country's inflation rate rose by 1.55% in May, marking the slowest pace in over four years.
Trade Talks Between Taiwan and the US
The Taiwanese government is actively engaging in dialogue with the US on tariff matters. Due to possible increases in import taxes, potentially up to 32%, Taiwan is striving for favorable trade conditions. In May, the first round of substantial discussions with US representatives concluded, described as having an open and friendly atmosphere.
The decision from Taiwan's central bank to maintain the 2% rate reflects confidence in the resilience of economic indicators despite external economic and trade risks.
