Taipei: Taiwan's central bank has decided to keep key interest rates unchanged for the sixth consecutive quarter following its quarterly policy meeting. This decision comes despite the U.S. Federal Reserve's recent 25-basis-point rate cut.

According to Focus Taiwan, the Central Bank of the Republic of China (Taiwan) has opted to maintain the local discount rate at 2.00 percent, which remains the highest in 15 years. Additionally, the rates on accommodations with and without collateral continue to be set at 2.375 percent and 4.250 percent, respectively.

Taiwan's economy currently faces uncertainties due to U.S. tariff policies. The Trump administration has imposed a 20 percent tariff on Taiwan, and ongoing negotiations aim to potentially reduce this levy. Furthermore, a Section 232 investigation initiated in April under the U.S. Trade Expansion Act could result in additional tariffs on semiconductors, increasing uncertainty for Taiwan's tech sector.

Economists suggest that the central bank's decision is intended to maintain economic flexibility in response to potential shocks from tariffs. While certain traditional industries in Taiwan have felt the pressure from U.S. tariffs, the technology sector has shown resilience, expanding investments to satisfy global demand. This sector's strength has led the Directorate General of Budget, Accounting and Statistics to revise its 2025 GDP growth forecast upward from 3.10 percent to 4.45 percent.

The robust economic growth observed in Taiwan has reduced the likelihood of a rate cut in the near future, according to economists.