Archive

August 14, 2025
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Norway: Holds Steady on Easing Path In August

  • Norges Bank unsurprisingly held rates at 4.25% as expected, maintaining a restrictive stance while inflation persists above 2% target.
  • The central bank signals 1-2 more cuts as likely in 2025 if the economy evolves as projected, with a September reduction widely anticipated by markets.
  • Trade policy uncertainty and sticky services inflation create upside risks, but the gradual normalisation path remains intact barring shocks.
August 14, 2025
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Peru: Cuts Paused As Space Squeezed

  • Peru's central bank (BCRP) held rates at 4.5% as expected, maintaining a cautious stance despite well-anchored inflation at 1.7% within the target range.
  • Global trade uncertainty weighs on the outlook, but future cuts are conditional on inflation data and external conditions affecting the economy.
  • The real rate is slightly above neutral, providing limited scope to ease, with a terminal rate around 4.0-4.25% reached by early 2026.
August 13, 2025
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Thailand Cuts Rates Amid Trade War

  • The BOT unanimously cut rates by 25bp to 1.50%, the fourth cut in 10 months, amid US trade policy headwinds and SME vulnerabilities.
  • Growth forecasts were maintained at 2.3%/1.7% for 2025/2026 despite the front-loaded export boost fading; so further easing is likely by year-end.
  • An accommodative policy stance addresses subdued inflation (-0.7% July) and negative credit growth while preserving financial stability.
August 12, 2025
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RBA Cuts as Productivity Concerns Grow

  • The RBA cut rates by 25bp to 3.60%, as expected, in the third reduction of 2025, with unanimous board support following July's surprise 6-3 hold pending inflation data.
  • The central bank downgraded its productivity growth assumption to 0.7% from 1.0%, lowering medium-term GDP forecasts and signalling structural economic challenges ahead.
  • The Governor signals that a "couple more" cuts are likely, with the cash rate path expected around 3.0% by 2026, while maintaining a data-dependent approach to future policy decisions.

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