Archive

December 17, 2025
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BI Hold: Rupiah Trumps Cuts

  • BI-Rate held at 4.75% as expected, with a pause in the easing cycle signalled and limited 2026 cuts conditional on rupiah stability amid transmission lags.
  • Focus shifts to KLM incentives (Rp388T disbursed) to fix 24bps lending rate lag vs 67bps deposit drop. Future cuts hinge on credit growth revival.
  • The Rupiah at Rp16,685/USD constrains the outlook amid US tariffs/Fed divergence. Growth needs transmission fixes before more easing.
December 16, 2025
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Chile's Disinflation Sprint Meets Policy Limits

  • Chile cut rates by 25bp to 4.5%, in line with expectations, forecasting inflation to hit 3% in Q1 2026, supporting further easing if convergence holds.
  • Peso appreciation and slowing labour costs beat forecasts, but wages are above historical averages and the neutral rate of 3.75-4.75% signals limited space ahead to cut.
  • Future cuts hinge on labour market data and external risks (copper, global growth). Policy is data-dependent amid a narrowing gap to the neutral rate.
December 11, 2025
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SNB: Zero Rate, Rising Policy Dilemmas

  • The SNB holds its policy rate at 0% in line with consensus. Markets now expect a prolonged pause, with little chance of negative rates in the near term.​
  • Despite near‑zero inflation, the SNB’s medium‑term forecasts justify keeping rates on hold, pointing to 0% policy rates well into 2026.​
  • Future rate moves hinge on franc strength, global trade risks and inflation persistence, with FX intervention preferred over renewed negative rates.​
December 11, 2025
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BSP Cuts Near Endpoint Amid Structural Headwinds

  • The BSP unsurprisingly cut rates by 25bps to 4.50% and signalled the cycle as near its end despite weakness; this matched the consensus but marks the fifth consecutive cut with 200bps total easing since August 2024.
  • Growth decelerated to a three-year low of 4.0% in Q3 amid governance concerns and trade policy uncertainty. Recovery is dependent on improved fiscal spending and confidence restoration.
  • Inflation forecasts are revised upward to 3.2% (2026) and 3.0% (2027), approaching the upper target band. Further easing is "likely limited" pending data showing effective transmission.

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