TAIPEI, March 16 (Reuters) – Taiwan’s central bank is expected to hold its policy interest rate steady this week and keep it in place into 2027, according to economists polled by Reuters, given the economy’s robust performance and no impact yet from the war in the Middle East.
In December, the central bank left its benchmark discount rate at 2%, as expected. It last raised the rate by 0.125 percentage points from 1.875% in March 2024, in anticipation of a rise in electricity prices.
At its next quarterly meeting on Thursday, the central bank is expected to keep the rate unchanged, according to all of the 29 economists surveyed.
Economists who provided forecasts beyond this week believed the bank would maintain its stance through the second quarter of 2027.
Taiwan’s tech-centred, export-dependent economy has benefited from the artificial intelligence boom, which has driven orders for companies like TSMC, the world’s largest contract chipmaker.
The economy is expected to expand by 7.7% this year, the government’s statistics agency said last month, after growing 8.68% in 2025, its fastest rate in 15 years.
“There is no sign of a slowdown in the first quarter of this year,” said analyst Wang Yu-Hsuan of First Capital Management.
Still, while Taiwan’s inflation remains below the central bank’s 2% “warning” line, the conflict in the Middle East could loom as an uncertainty if fighting persists and energy prices remain high, said analyst Kevin Wang of Taishin Securities Investment Advisory.
“In that case, a difficult situation of stagflation could emerge,” he said.
Taiwan’s consumer price index rose by 1.75% in February, slightly higher than analysts’ forecasts of 1.5%, but it was the 10th month in a row that it had been below the central bank’s 2% “warning” line.
The central bank will also unveil its revised economic growth and inflation forecasts for this year on Thursday.
(Poll compiled by Susobhan Sarkar and Carol Lee; Reporting by Ben Blanchard and Faith Hung; Additional reporting by Liang-sa Loh and Roger Tung; Editing by Thomas Derpinghaus)
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