Archive

January 22, 2025
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Malaysia: Policy Rate Held At 3.0% (Consensus 3.0%) in Jan-25

  • Bank Negara Malaysia maintained the Overnight Policy Rate at 3%, consistent with consensus expectations, citing sustained economic growth and manageable inflationary pressures. The decision reflects a balanced approach amid moderating global inflation and easing monetary policy conditions globally.
  • Domestic growth remains resilient, driven by robust investment and household spending, but risks such as a potential global slowdown, trade restrictions, and commodity production volatility could weigh on the outlook. Upside growth potential exists from stronger spillovers in technology, tourism, and faster investment execution.
  • Inflation is expected to remain contained in 2025, supported by easing cost pressures, though spillover effects from domestic policies and fluctuations in commodity prices could introduce upside risks. The MPC’s vigilant, data-driven approach underscores its commitment to sustainable growth and price stability.

January 16, 2025
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Korea: Policy Rate Held At 3.0% (Consensus 2.75%) in Jan-25

  • The Bank of Korea maintained its base interest rate at 3.00%, defying market expectations of a 25bp cut, citing stabilising inflation and heightened risks from domestic political instability and exchange rate volatility.
  • Domestic economic recovery remains fragile, with weak consumption and investment trends, while external challenges, including US protectionist policies and strong dollar dynamics, further constrain growth prospects, projected at 1.9% for 2025.
  • Future rate cuts will depend on balancing inflationary stability, financial risks, and economic uncertainties, with the Bank signalling a cautious approach to monetary easing amid volatile domestic and international conditions.

January 15, 2025
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Indonesia: 25bp Rate Cut to 5.75% (Consensus 6.0%) in Jan-25

  • Bank Indonesia lowered the BI-Rate to 5.75%, surprising consensus expectations. It cited low inflation and the need to support growth amid subdued domestic demand and stable external conditions.
  • The Rupiah remains relatively stable due to robust reserves and proactive interventions, although global pressures from US fiscal policies and limited FFR cuts pose risks to external stability.
  • Future policy adjustments will hinge on domestic growth performance and global financial developments, with continued emphasis on macroprudential measures, financial digitalisation, and fiscal coordination to strengthen economic resilience.

December 20, 2024
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Colombia: 25bp Rate Cut To 9.5% (Consensus 9.25%) in Dec-24

  • Banco de la República reduced the benchmark rate by 25bps to 9.50%, undershooting market expectations of a 50bp cut due to concerns over persistent inflation and exchange rate volatility.
  • While headline inflation fell to 5.2% in November, stable core inflation and peso depreciation constrain BanRep’s scope for faster rate cuts, as imported inflation risks remain significant.
  • Robust Q3 GDP growth and a resilient labour market support gradual monetary easing; however, heightened external financial pressures and fiscal uncertainties will heavily influence future policy decisions.