Taiwan’s M2 money supply growth rate for November 2025 registered at 5.04% year-over-year, according to the latest release from the Sigmanomics database. This figure marks a slight deceleration from October’s 5.44% but remains elevated compared to mid-2025 lows near 3.33%. The temporal scope covers the past 12 months, highlighting a rebound from summer troughs and a recent plateau in liquidity expansion.

Drivers this month

• Moderate credit expansion in corporate and household sectors.
• Stable deposit growth amid cautious consumer spending.
• Central bank’s measured liquidity injections balancing inflation risks.

Policy pulse

The current M2 growth rate sits comfortably within the central bank’s implicit target range, reflecting a calibrated monetary policy stance. Inflation remains contained, allowing the central bank to maintain accommodative conditions without overheating the economy.

Market lens

Following the print, the New Taiwan Dollar (TWD) showed mild appreciation against the USD, while short-term bond yields edged slightly lower, signaling market confidence in stable liquidity conditions.

Core macroeconomic indicators provide context for the M2 growth trend. Taiwan’s GDP growth for Q3 2025 was 3.10% YoY, supported by robust exports and domestic demand. Inflation remains moderate at 2.20% YoY, consistent with the central bank’s target. Unemployment stands at a low 3.70%, underpinning steady wage growth and consumer confidence.

Monetary Policy & Financial Conditions

The Central Bank of Taiwan has maintained its policy rate at 1.38% since mid-2025, emphasizing liquidity management over aggressive tightening. Financial conditions remain accommodative, with credit growth steady at 6.50% YoY for corporate loans and 4.80% for consumer credit.

Fiscal Policy & Government Budget

Fiscal policy remains supportive, with the government running a modest deficit of 1.80% of GDP in the first three quarters of 2025. Public investment in infrastructure and technology sectors continues, indirectly fueling credit demand and money supply growth.

External Shocks & Geopolitical Risks

Heightened geopolitical tensions in the Taiwan Strait and global supply chain disruptions pose downside risks. However, Taiwan’s export resilience and diversified trade partnerships mitigate immediate shocks to liquidity and economic activity.

Historical comparisons highlight that the current 5.04% is below the peak of 5.53% recorded in February 2025 but well above the 3.33% low in June 2025. This range underscores the cyclical nature of Taiwan’s liquidity environment amid global monetary shifts.

Market lens

Immediate reaction: The TWD/USD spot rate appreciated 0.15% within the first hour post-release, while 2-year government bond yields declined by 3 basis points, reflecting market relief at stable liquidity growth.

Looking ahead, Taiwan’s M2 growth trajectory will be shaped by domestic demand, monetary policy adjustments, and external factors. We outline three scenarios:

• Bullish (30% probability): M2 growth stabilizes near 5%, supporting sustained credit expansion and GDP growth above 3.50%. Inflation remains moderate, enabling accommodative policy.
• Base (50% probability): M2 growth moderates to 4.50%-5%, reflecting cautious credit demand amid geopolitical tensions. Inflation and policy rates remain stable.
• Bearish (20% probability): External shocks or tighter global financial conditions push M2 growth below 4%, slowing credit and economic activity, with inflationary pressures easing.

Policy pulse

The Central Bank is likely to maintain a cautious stance, balancing inflation control with growth support. Any rate hikes would be gradual and data-dependent.

Market lens

Financial markets will monitor M2 trends closely as a liquidity gauge. A sustained slowdown could pressure TWD and local equities, while stable growth supports risk appetite.

Taiwan’s November 2025 M2 money supply growth of 5.04% YoY reflects a stable yet cautious liquidity environment. The slight deceleration from October’s peak signals prudent monetary management amid moderate inflation and external uncertainties. Historical trends show resilience in Taiwan’s monetary aggregates, supporting steady economic growth and credit expansion.

Looking forward, the balance of risks leans toward continued moderate growth in money supply, with the central bank poised to adjust policy as needed. Geopolitical and global financial risks remain key downside factors, while domestic demand and fiscal support underpin upside potential.

Key Markets Likely to React to M2 Money Supply YoY

Taiwan’s M2 money supply growth is a critical indicator for financial markets, influencing currency strength, bond yields, and equity valuations. Markets sensitive to liquidity conditions and monetary policy will react to shifts in M2 trends, reflecting changes in credit availability and inflation expectations.

• TWDUSD: The Taiwan Dollar’s exchange rate closely tracks liquidity changes, with M2 growth impacting currency strength.
• 2330.TW: Taiwan Semiconductor Manufacturing Company’s stock price correlates with economic growth and liquidity conditions.
• 0050.TW: Taiwan’s ETF reflecting broad market sentiment, sensitive to monetary policy shifts.
• BTCUSD: Bitcoin’s price often reacts to liquidity and risk appetite changes globally, including Taiwan’s monetary trends.
• USDCNY: China’s currency pair influences regional trade and financial conditions, indirectly affecting Taiwan’s liquidity environment.

FAQs

What is Taiwan’s M2 Money Supply YoY?

Taiwan’s M2 Money Supply YoY measures the annual growth rate of broad money, reflecting liquidity in the economy.

How does M2 growth affect Taiwan’s economy?

M2 growth influences credit availability, inflation, and economic activity, impacting growth prospects and financial markets.

Why monitor M2 Money Supply YoY?

Tracking M2 helps assess monetary policy stance, inflation risks, and market liquidity conditions.

Takeaway: Taiwan’s M2 growth remains robust but moderating, signaling balanced liquidity that supports steady economic growth amid global uncertainties.

This has been drafted with AI assistance and then thoroughly reviewed, refined, and approved by our human editorial team to ensure accuracy, and originality.

TWDUSD – Taiwan Dollar to US Dollar exchange rate, sensitive to liquidity and monetary policy shifts.

2330.TW – Taiwan Semiconductor Manufacturing Company, a bellwether for Taiwan’s economic and liquidity conditions.

0050.TW – Taiwan’s broad market ETF, reflecting overall market sentiment tied to monetary trends.

BTCUSD – Bitcoin’s USD pair, often influenced by global liquidity and risk appetite.

USDCNY – US Dollar to Chinese Yuan, impacting regional trade and financial conditions relevant to Taiwan.