TAIPEI (Reuters) -Taiwan’s central bank decided unanimously to hold interest rates steady, citing strong economic growth in the tech and AI sectors, while raising concerns about the impact of tariffs on the island’s export economy, minutes from the latest board meeting showed on Thursday.
In a widely expected move in September, the central bank left the benchmark discount rate unchanged at 2%, a level it has maintained since March 2024.
It also raised its economic growth forecast for the year, hailing booming exports, but warned the impact of U.S. tariffs could be damaging enough to prompt a change in monetary policy going forward.
One board member, who was not identified in the minutes of last month’s meeting, said: “Taiwan’s economy still faces numerous uncertainties in the second half of this year, such as future adjustments to the U.S. tariffs under Section 232.”
Another board member said that inflation might continue on a downward trajectory if the Taiwan dollar strengthens or international oil prices weaken. However, sticky prices on expenses such as dining out and rent, as well as unpredictable weather events such as typhoons, could exert upside pressures on prices.
Taiwan’s inflation rate – 1.25% in September and its slowest pace in 4-1/2 years – has been much milder than that of economies in Europe and the United States, and its benchmark interest rate has also been correspondingly lower.
The central bank – which has 15 members on its board – holds its next quarterly rate-setting meeting in December.
(Reporting by Liang-sa Loh and Faith Hung; Editing by Edwina Gibbs)
