Heteronomics Archive

February 19, 2025

RBNZ: 50bp Rate Cut To 3.75% (Consensus 3.75%) in Feb-25

The Monetary Policy Committee reduced the OCR by 50 basis points to 3.75%, in line with expectations, citing declining inflationary pressures and significant economic slack, with further cuts likely through 2025.
While near-term inflation may experience volatility due to exchange rate depreciation and higher fuel costs, core inflation and inflation expectations remain well-anchored around the target midpoint.
Global risks, including trade policy uncertainty and geopolitical fragmentation, pose downside risks to growth. Still, the Committee remains confident that maintaining inflation stability will provide flexibility to respond to future shocks.

February 19, 2025

Bank Indonesia held the BI-Rate at 5.75%, in line with expectations, maintaining a cautious stance as inflation remains within target and global financial uncertainty persists.
The central bank reinforced macroprudential measures to support credit growth and external stability, including expanding the KLM programme and strengthening foreign exchange policies.
Future rate decisions will be data-driven, with further easing contingent on inflation stability, Rupiah resilience, and global financial market developments, particularly the trajectory of US monetary policy.

February 18, 2025

The RBA lowered the cash rate to 4.1% as inflation moderates faster than expected, with underlying inflation at 3.2% in the December quarter, supported by easing wage pressures and subdued private demand.
Labour market tightness persists despite overall economic weakness, with the unemployment rate at 4%, sustained employment growth, and high unit labour costs posing potential inflationary risks.
The outlook remains uncertain, with global risks including US trade tensions and geopolitical instability, while further rate cuts will depend on continued disinflation and stable labour market conditions.

February 13, 2025

The BSP held its key rate at 5.75%, contradicting market expectations of a 25bp cut, citing persistent global economic uncertainties and a stable inflation outlook.
Inflation risks for 2025 and 2026 are balanced, though upside pressures from utilities and downside risks from lower rice tariffs remain.
The BSP signalled a cautious, data-dependent approach to easing, with future rate cuts contingent on further clarity regarding inflation trends and global economic developments.