Taiwan central bank holds rate as expected, sees little impact from US tariffs

By Faith Hung and Liang-sa Loh

TAIPEI (Reuters) -Taiwan's central bank held its policy rate unchanged as expected on Thursday, prompted by lingering concerns over inflation and uncertainty about new U.S. trade tariffs.

The central bank left the benchmark discount rate at 2%, in line with predictions from a Reuters poll of 33 economists, who all expected the rate to be held steady.

The central bank slightly lowered its 2025 estimate for economic growth to 3.05% from a forecast of 3.13% given in December. Taiwan's economy grew 4.59% in 2024.

Central bank governor Yang Chin-long told reporters following the rate-setting meeting that Taiwan had so far seen only limited impact from higher U.S. tariffs on countries including Canada, Mexico and China, and the island's export momentum would continue this year.

Trump has threatened across-the-board import tariffs, targeting countries with large trade surpluses with the United States, and has also said he could put tariffs on semiconductors, a sector Taiwan dominates.

Taiwan's tech-focused economy, home to the world's largest chipmaker TSMC, has powered ahead thanks to demand from companies such as Nvidia for artificial intelligence applications.

Yang said inflation was his "first priority" and "currently under control", adding there were "no conditions" for Taiwan to adopt more loose monetary policy.

The bank kept its consumer price index (CPI) forecast for this year at 1.89%, unchanged from its December forecast.

(Reporting by Liang-sa Loh and Faith Hung; Writing by Yimou LeeEditing by Muralikumar Anantharaman, Peter Graff and Kevin Liffey)