Taiwan Holds Policy Rate at 2% for 10th Straight Time Despite U.S. and Japan Rate Hikes

[Financial News] The Central Bank of the Republic of China (Taiwan) left its policy rate unchanged for the 10th consecutive time despite the U.S. rate hike this month.
According to local media outlets, including Central News Agency and United Daily News, the Central Bank of the Republic of China (Taiwan) held a regular monetary policy meeting on the 17th and kept its policy rate at 2%. The decision was in line with market expectations.
The Central Bank of the Republic of China (Taiwan) said in a statement, "As Taiwan's economy continues to grow moderately, we decided to keep the policy rate at its current level after comprehensively considering uncertainties in the global economic outlook and the potential impact of U.S. economic and trade policies on Taiwan's economy."
At a press conference, Yang Chin-long, governor of the Central Bank of the Republic of China (Taiwan), emphasized, "Monetary policy is not about following other countries but taking an independent path." He added, "Over the long term, Taiwan's inflation rate has been relatively moderate compared with those of major economies. Although we have not raised interest rates, financial conditions have been moving in a tightening direction."
Yang Chin-long said that two central bank board members had opposed holding rates steady over concerns about inflation. "If inflation continues in 2027, we will take action," he explained.
The Federal Reserve System (Fed), which had held its policy rate steady for five consecutive meetings this year, announced on the 16th local time that it would raise the rate by 0.25 percentage points, setting it in a range of 3.75% to 4%. The European Central Bank (ECB), which oversees the eurozone, comprising 21 countries that use the euro, also announced on the 10th that it would raise its three key policy rates by 0.25 percentage points each. The Bank of Japan (BOJ) concluded its monetary policy meeting on the 18th and announced that it would raise its policy rate by 0.25 percentage points to 1.25%.
However, the Bank of England (BOE) said at its meeting on the 17th that it would keep its policy rate unchanged at around 3.75% for the sixth consecutive time.
In its latest report, British market research firm Capital Economics forecast that Taiwan would keep its policy rate at 2% for the time being, as inflationary pressures remain contained and economic growth is solid. In an announcement on the 17th, the Central Bank of the Republic of China (Taiwan) slightly raised its forecast for 2026 consumer price index (CPI) inflation from 1.91% in June to 2.03%. At the same time, it raised its forecast for 2026 gross domestic product (GDP) growth from 9.45% in June to 11.48%, an increase of 2.03 percentage points.
[email protected] Park Jong-won Reporter