Archive

January 22, 2026
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BNM: Flexibility Amid Global Bifurcation

  • BNM kept its OPR at 2.75%, in line with the consensus. Benign inflation and solid growth justify a steady near-term rate path.
  • With inflation anchored near 2% and growth resilient, policy stays neutral, preserving flexibility rather than signalling a clear hike or cut bias.
  • Future rate moves hinge on tariff and global inflation risks. Shocks to trade or prices could shift BNM from a prolonged hold to recalibration.
January 21, 2026
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Indonesia: Stability Over Stimulus

  • BI held the policy rate at 4.75%, matching the consensus, as rupiah weakness and capital outflows constrain near-term scope for further rate cuts.
  • Despite a dovish bias and inflation within target, BI signals that any future easing will be gradual and conditional on rupiah stabilisation and better policy transmission.
  • Market expectations still point to modest cuts toward 4.25% in 2026, but global yields, FX volatility and fiscal concerns could delay or reduce the extent of easing.
January 15, 2026
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Currency Constraint Ends Korea's Easing Cycle

  • The BoK held the policy rate at 2.50%, in line with consensus, but effectively ended the easing bias, signalling a prolonged on-hold stance for 2026.​
  • Despite improving growth and near-target inflation, FX weakness and financial stability risks limit the scope for future cuts and keep rate hikes a low-probability tail risk.​
  • Housing and household debt vulnerabilities mean any change in the 2.50% rate will hinge on clearer won stabilisation and a sustained, benign inflation trajectory.
December 19, 2025
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BOJ: Measured Steps Toward Normalisation

  • A hike to 0.75% was delivered as expected, reflecting confidence in wage-led inflation momentum, though real rates remain deeply negative and uncertainty around trade policy and wage sustainability persists.
  • Future tightening hinges critically on 2026 spring wage negotiations reaching 5%+ and underlying inflation remaining firm as food-price effects wane. Some dissenting board members questioned inflation's near-term durability.
  • Real interest rates at significantly negative levels permit gradual tightening toward the estimated 1-2.5% neutral range, with markets pricing 1.0% by mid-2026. Limited runway and external risks may constrain the pace of normalisation.

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