Archive

November 06, 2025
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Inflation Persistence Constrains Norges Bank

  • The Norges Bank held rates at 4% as expected. Core inflation at 3% constrains further cuts despite emerging economic slack in the coming year.
  • Governor Bache stressed the bank is "not in a hurry" to cut rates, projecting one reduction annually through 2028. Cuts depend on disinflation progressing as forecast.
  • December's new forecasts will be critical—faster disinflation or sharper labour market weakness could accelerate cuts, while persistent inflation could keep rates higher for longer.
November 06, 2025
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Malaysia Defies Regional Easing

  • Bank Negara maintained the OPR at 2.75% in November 2025, aligned with forecasts, reflecting confidence in steady 5.2% Q3 growth and contained inflation.​
  • The decision contrasts with regional easing trends; the central bank views the current stance as appropriate amid resilient domestic demand and easing tariff uncertainties.​
  • Forward guidance indicates rates are likely to be stable through mid-2026, contingent on global trade developments, inflation trends, and US rate shifts.
November 06, 2025
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Mexico: Cautious Easing in Uncertain Times

  • Banxico cut rates by 25bp to 7.25%, in line with the consensus. Guidance turned more cautious, with policymakers less committed to further easing soon.​
  • The 4-1 vote (one dissent for a hold) underscores internal concern about persistent core inflation, which could constrain scope for additional rate cuts.​
  • With GDP contracting and core prices sticky, future rate moves hinge on inflation's path and external risks. The pace of easing will likely slow from here.
November 05, 2025
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Brazil's Cautious Monetary Pause

  • Brazil's Copom holds Selic at 15% as expected, but signals a very prolonged pause ahead with rates to stay elevated while inflation expectations remain deanchored above target.
  • The committee emphasises that a contractionary policy is needed despite moderate growth, citing tariff risks, currency depreciation pass-through, and resilient labour market pressures.
  • Rate hikes remain optionally available if inflation expectations fail to re-anchor, but markets now price March 2026 easing, contingent on fiscal discipline and external stability.

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