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Taiwan’s Central bank is expected to maintain its current policy interest rate this week as it navigates concerns about Inflation, according to a Reuters poll of economists. The benchmark discount rate has been held at 2% since June, and it is anticipated to remain unchanged at the upcoming meeting on Thursday.
Economists predict that rate cuts may not occur until the third quarter of 2025, with the median estimate suggesting a decrease to 1.875%. While Taiwan’s Inflation rate of 2.36% in August surpasses expectations, the Central bank considers 2% to be its “warning” threshold.
Given Taiwan’s inflationary pressures, experts like Hsu Chih-yen of MasterLink Securities anticipate a status quo decision by the Central bank, contrasting with moves by the U.S. Federal Reserve and the European Central bank to lower Interest rates. The Taiwanese economy, driven by tech exports and demand for AI technology, has seen growth projections revised slightly downward amidst uncertainties in AI demand.
The Central bank is set to announce updated economic growth and Inflation forecasts for this year, as well as initial predictions for the upcoming year, on Thursday.
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Emma Collins, graduated in Financial Economics from the University of Chicago in the USA in 2016. She has since worked at an asset management firm in New York, where she specializes in investment strategies and portfolio management. Emma has a keen interest in financial analysis and has published several articles in renowned financial journals. Her work focuses on providing actionable insights to investors, and she is known for her forward-thinking approach to managing financial portfolios.
