This study examines the credit policies implemented by the Central Bank of the Republic of China (Taiwan) and constructs a credit policy change index covering 1991 to 2019. We find that the Bank employed various credit policy tools and adjusted policy interest rates in response to economic shocks over the past 30 years. Using a narrative identification strategy, we identify credit policy shocks that are unrelated to the business or financial cycle and compare the effects of credit policy to those of interest rate changes. Our analysis reveals that tighter credit policies strongly reduce bank lending, with a much shorter lag than inter-est rate increases. Furthermore, changes in both credit policy and interest rates significantly affect output, but only interest rate changes have a significantly negative impact on the consumer price index.