Heteronomics Archive

April 30, 2025

Colombia: 25bp Rate Cut To 9.25% (Consensus 9.5%) in Apr-25

Banco de la República unanimously cut its benchmark rate by 25bps to 9.25%, surprising consensus expectations for no change and breaking a recent streak of unexpected holds.
Inflation resumed its downward path, with core and headline figures easing and market-based expectations declining, supporting a measured policy loosening stance.
While domestic demand remains resilient and growth forecasts have been upgraded, external financing conditions and fiscal uncertainty continue to pose constraints on the pace of further easing.

April 23, 2025

Bank Indonesia maintained the BI-Rate at 5.75%, in line with expectations, with a cautious stance to safeguard price stability and currency fundamentals amid heightened global uncertainty stemming from US-China trade tensions.
A resilient external position—anchored by a robust trade surplus, substantial reserves, and controlled inflation—has enabled the central bank to manage volatility while preserving policy flexibility.
With inflation subdued and global headwinds intensifying, Bank Indonesia retains an easing bias, with future rate cuts contingent on inflation dynamics, Rupiah stability, and international capital flow conditions.

April 17, 2025

The Bank of Korea maintained its base rate at 2.75%, aligning with the majority consensus, as heightened uncertainty over US tariff policy, domestic stimulus measures, and exchange rate volatility warranted a pause in easing, despite deteriorating growth prospects.
Domestic GDP is now expected to undershoot the 1.5% forecast from February due to weak Q1 performance, persistent trade frictions, and subdued domestic demand, while inflation remains stable at around 2%.
Further rate cuts remain likely, but the MPC will assess external volatility and policy clarity before resuming easing, with the May outlook expected to be a key inflexion point.

April 16, 2025

The Bank of Canada held its policy rate at 2.75%, meeting expectations but disappointing those market participants who had positioned for another rate cut amid rising trade tensions and economic uncertainty.
The decision reflects a careful balance between weakening domestic demand and inflation risks from tariff-related cost increases, with short-term inflation expectations having risen despite moderating core inflation.
Future policy adjustments will be guided by the evolving trade landscape, the extent of demand erosion and cost pass-through, and the anchoring of inflation expectations, with the Bank highlighting its limited role in mitigating trade-driven shocks.