The Central Bank of the Republic of China is cautious about global economic impacts from Trump's policies and may cut rates if the CPI falls below 1.5%. Taiwan's exports, particularly in semiconductors, have shown strong growth, supporting economic expansion. However, the tech-heavy market has experienced significant foreign investor sell-offs amid global chip stock declines. Taiwan Semiconductor Manufacturing Co. reported a 39% revenue increase, highlighting continued demand for semiconductors essential for AI development, though the sustainability of the AI boom remains uncertain.
Key takeaways:
- Taiwan is expected to maintain its key policy rate at 2% as it considers potential chip tariffs from the Trump administration and the outlook for AI and inflation.
- All 29 economists surveyed by Bloomberg predict the central bank will keep the rate unchanged for the fourth consecutive quarter.
- Concerns include President Trump's threat of 25% tariffs on semiconductors and rising consumer prices, which are slightly above the central bank's comfort level.
- Taiwan's exports, particularly in semiconductors, continue to grow, but there are concerns about the sustainability of the AI boom.