Taiwan Central Bank’s June Rate Decision Divides Financial Groups as AI Demand Lifts Growth Outlook

Taiwan’s central bank will hold its second-quarter board meeting in June, with a decision to keep rates unchanged set to affect the housing market, corporate financing and financial-sector funding costs. Meanwhile, stronger-than-expected demand for AI servers and related components is boosting exports, prompting the Directorate-General of Budget, Accounting and Statistics to raise its forecast for Taiwan’s economic growth this year. The technology upcycle has become an important source of support for the financial sector and broader economy.

The latest market forecasts are divided. CTBC Financial expects the central bank could raise rates by half a notch, or 0.125 percentage points, in June, making it the most hawkish of the three groups. Fubon Financial and Cathay Financial see a greater likelihood of no increase. Most financial institutions surveyed also expect rates to remain unchanged for a ninth consecutive meeting, though they are watching for a surprise adjustment in response to inflation, the housing market or the AI-driven export boom.