Taiwan Central Bank Holds Rates, Raises Inflation Outlook

This decision keeps secured and unsecured lending rates at 2.375% and 4.250% respectively. However, the bank simultaneously increased its inflation forecast for 2026 to 1.80% from a previous 1.63%, citing heightened uncertainty stemming from the Middle East conflict and its impact on energy prices.

This geopolitical backdrop complicates global monetary policy, forcing central banks to balance inflation control with economic growth. Taiwan has maintained some of Asia's tightest monetary policies, opting against the rate cuts seen elsewhere last year.

Strong domestic economic growth and stable inflation have provided policymakers the flexibility to remain on the sidelines. The current global environment suggests that any expectations for policy easing in Taiwan this year are likely to be pushed further out, with the last easing occurring in 2020.