Middle East Conflict and Inflation Pressure Lift Taiwan's Two-Year CD Rate to 1.278%

The Central Bank of the Republic of China (Taiwan) issues two-year certificates of deposit to manage medium- and long-term liquidity in the banking system and gauge market interest-rate expectations. The U.S.-Iran war has increased energy and inflation risks and pushed back expectations for global rate cuts. Foreign investors' net selling of Taiwan stocks and capital outflows have also made New Taiwan dollar liquidity management more cautious, making the auction yield an important indicator of policy anchoring and funding conditions.

The central bank auctioned NT$25 billion of two-year certificates of deposit on March 17, 2026, for issuance on March 18. Total bids reached NT$57.45 billion, representing a bid-to-cover ratio of 2.30, while 43.52% of bids were accepted. The weighted-average yield rose 2.9 basis points from the previous auction to 1.278%, above market expectations of 1.26%–1.275%. At its March 19 board meeting, the central bank decided to keep its policy rates unchanged.