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Taiwan central bank seen raising policy rate to 2.125% in December
DBS economist Ma Tieying links the expected decision to CPI holding above 2% and rising electricity price risks after November elections, while housing credit controls continue to ease.
DBS economist Ma Tieying expects the Central Bank of the Republic of China to raise its policy discount rate by 12.5 basis points to 2.125% at its December meeting, citing CPI inflation staying above 2% and growing risks around electricity prices.
FXStreet reports DBS expects the case for a December hike to be reinforced if electricity prices rise after November local elections, lifting inflation expectations, and notes that financial conditions are already tighter.
The bank also points to gradual easing of housing credit controls as supportive of a modest housing recovery into 2027, including a September increase to the LTV cap on second-home mortgage loans to 70%.
DBS further expects the housing market to recover from 4Q26 into 2027, and says the existing-home market has shown early signs of recovery, with Sinyi housing prices moving back to slightly positive year-over-year growth.