Archive

Indonesia: Policy Rate Held At 6.00% (consensus 6.0%) in Oct-24

• Bank Indonesia kept the BI-Rate at 6.00%, aligning with market expectations, focusing on inflation control within the 2.5% ±1% target and maintaining Rupiah stability amid global uncertainties.
• The central bank’s cautious stance reflects concerns about geopolitical risks and global market volatility, while future rate decisions will hinge on inflation trends, exchange rate stability, and economic growth prospects.
• Ongoing policy measures aim to reinforce external stability with strategic currency interventions and supportive macroprudential policies to bolster domestic growth drivers.

Thailand: 25bp Rate Cut To 2.25% (consensus 2.5%) in Oct-24

• The Bank of Thailand’s unexpected 25bp rate cut to 2.25% signals a dovish shift to support debt servicing, contrary to the consensus of no change.
• Future policy will hinge on inflation developments, particularly the gradual rise towards the target range, plus sectoral economic growth disparities.
• Credit conditions, debt deleveraging, and global monetary trends will influence the central bank's rate trajectory.

UK Inflation Hits Its Bouncy Bottom

• Surprisingly soft UK inflation data extended across the headline and conventional core metrics, partly because of substantial payback in airfares after August’s surge.
• Only a slight unwind in October and ambiguous historical precedents for November mean much of this downside persists. However, other underlying signals were resilient.
• The BoE can focus on this downside news and cut in November. Ultimately, signals for the underlying pressures in the cyclically tight UK economy should urge an early pause.

By Philip Rush

UK Cycle Tightens As Policy Eases

• UK unemployment dropped by another 16bps in August to 4.0%, sustaining a 0.2pp fall on last year. Short-term unemployment looks even tighter as demand trends resiliently.
• Resurgent employment and hours worked hawkishly drive the cyclical tightening while redundancies remain low and weekly vacancies trend slightly higher.
• Slowing wage growth provides an excuse for the BoE to cut again in November but not to accelerate easing nor extend it far. A policy reversal may be needed in 2025.

By Philip Rush