Taiwan's central bank held its policy rate at 2% on the 17th, as markets had expected. The move reflects a tech-driven economy that remains strong and relatively mild inflation, but the bank signaled that its policy stance is tilted toward tightening. Governor Yang Chin-long told reporters after the quarterly monetary policy meeting that the stance of monetary policy does not follow other countries but walks its own path, noting that while rates have not been raised, monetary adjustment is moving in a tightening direction. According to the governor, two board members voted against the decision to hold rates, citing inflation concerns, and said they would act if inflation continues to rise in 2027. The central bank slightly raised its forecast for consumer price index growth in 2026 to 2.03% from 1.91% projected in June, while expecting it to slow to 1.83% in 2027. It raised its 2026 economic growth forecast to 11.48% from 9.45% as of June, and said growth would slow to 5.82% in 2027. Growth in 2025 was 8.68%, the fastest in 15 years.
Central bank signaled tightening bias and flagged inflation concerns, pushing Taiwan bond yields up
