Heteronomics Archive

May 21, 2025

Indonesia: 25bp Rate Cut To 5.5% (Consensus 5.5%) in May-25

Bank Indonesia cut the BI-Rate by 25 basis points to 5.50%, matching consensus forecasts and resuming monetary easing after a three-meeting pause, citing controlled inflation and rupiah stability.
The decision was driven by subdued inflation, a stabilised currency, and weaker-than-expected GDP growth, with BI revising its 2025 growth forecast slightly downward and emphasising the need to support domestic demand.
Future interest rate policy will remain data-dependent, with further easing possible if inflation and currency stability persist. Still, BI is expected to proceed cautiously given ongoing global uncertainties and the need to safeguard external resilience.

May 20, 2025

The RBA cut the cash rate by 25bps to 3.85%, in line with expectations, as trimmed mean inflation fell below 3% and is likely to remain near the midpoint of the 2–3% target range.
Despite easing financial conditions and recovering household incomes, consumption momentum remains weak, while high unit labour costs, driven by subdued productivity, present lingering inflation risks.
Global trade uncertainty and geopolitical tensions weigh heavily on the outlook, reinforcing the RBA’s cautious approach and commitment to respond decisively if downside risks to growth or inflation emerge.

May 15, 2025

As expected, Banco de México cut the overnight interest rate by 50 basis points to 8.50%, continuing its cautious easing cycle amid ongoing disinflation and subdued economic growth.
Headline and core inflation stood at 3.93% in April, but short-term forecasts were revised upward due to stronger goods price pressures, with the inflation path still projected to reach the target by Q3 2026.
Despite improved inflation dynamics, upside risks persist. Nonetheless, the Bank signalled further cuts of similar magnitude, while seeking to maintain a restrictive stance that safeguards convergence to the 3% target.

May 08, 2025

The Norges Bank held its policy rate at 4.5% in May, consistent with consensus and March guidance, citing persistent inflation and heightened global uncertainty as reasons to maintain a restrictive stance.
Although inflation has eased, underlying pressures remain strong, with CPI-ATE stable at 3.4% and a weaker krone raising imported goods prices, complicating the timing of future easing.
The Committee continues to signal a likely rate cut in 2025 but flagged increased trade barriers and divergent global developments as factors that could shift the policy trajectory in either direction.