Archive

November 19, 2025
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Indonesia Holds Rates as External Headwinds Intensify

  • Bank Indonesia paused rate cuts at 4.75%, shifting focus from growth to rupiah stability. This outcome was no surprise to the consensus as external risks intensified.​
  • Further easing depends on rupiah stabilisation, not inflation alone. Elevated term premia and expanded FX operations reflect caution.​
  • Macroprudential incentives and FX measures aim to support growth while monitoring weak credit transmission after previous rate cuts.
November 06, 2025
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Inflation Persistence Constrains Norges Bank

  • The Norges Bank held rates at 4% as expected. Core inflation at 3% constrains further cuts despite emerging economic slack in the coming year.
  • Governor Bache stressed the bank is "not in a hurry" to cut rates, projecting one reduction annually through 2028. Cuts depend on disinflation progressing as forecast.
  • December's new forecasts will be critical—faster disinflation or sharper labour market weakness could accelerate cuts, while persistent inflation could keep rates higher for longer.
November 06, 2025
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Mexico: Cautious Easing in Uncertain Times

  • Banxico cut rates by 25bp to 7.25%, in line with the consensus. Guidance turned more cautious, with policymakers less committed to further easing soon.​
  • The 4-1 vote (one dissent for a hold) underscores internal concern about persistent core inflation, which could constrain scope for additional rate cuts.​
  • With GDP contracting and core prices sticky, future rate moves hinge on inflation's path and external risks. The pace of easing will likely slow from here.
November 06, 2025
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Malaysia Defies Regional Easing

  • Bank Negara maintained the OPR at 2.75% in November 2025, aligned with forecasts, reflecting confidence in steady 5.2% Q3 growth and contained inflation.​
  • The decision contrasts with regional easing trends; the central bank views the current stance as appropriate amid resilient domestic demand and easing tariff uncertainties.​
  • Forward guidance indicates rates are likely to be stable through mid-2026, contingent on global trade developments, inflation trends, and US rate shifts.

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