Heteronomics Archive

July 10, 2025

Korea: Policy Rate Held At 2.5% (Consensus 2.5%) in Jul-25

The Bank of Korea held its base rate at 2.50% as expected, pausing its easing cycle after household loans surged 6.5 trillion won in June and housing prices accelerated in Seoul, demonstrating that financial stability concerns now outweigh immediate growth support needs.
While economic growth remains subdued with a revised 0.8% forecast for 2025 and trade uncertainty persists, the Committee prioritised evaluating recently strengthened household debt management measures over additional monetary stimulus, signalling a defensive policy stance.
Future rate cuts remain contingent on financial stability developments and external conditions, with September presenting the next likely opportunity for easing if household debt growth moderates and US-Korea trade relations stabilise.

July 09, 2025

The RBNZ unanimously held the OCR at 3.25% after six consecutive cuts, marking the first pause in its easing cycle as inflation edges towards the top of the 1-3% target band.
The Committee maintains an explicit easing bias, signalling that further rate cuts are expected if medium-term inflation pressures continue to ease as projected.
Future monetary policy decisions will be heavily influenced by global trade tensions, domestic economic recovery momentum, and inflation expectations amid an explicitly uncertain outlook.

July 09, 2025

BNM trimmed the OPR to 2.75%, a move anticipated by just over half of surveyed economists, reflecting a mildly surprising tilt towards accommodation.
Future rate decisions hinge on tariff negotiations, subsidy rationalisation, and whether subdued core inflation persists within the 1.5%–2.5% comfort band.
With liquidity bolstered by an earlier SRR cut and inflation benign, the MPC retains scope for one further 25 bp reduction should external demand weaken further, but ringgit stability and fiscal adjustments will temper the pace of any additional easing.

July 08, 2025

The RBA surprised markets by maintaining the cash rate at 3.85%, rejecting consensus expectations for a cut and citing the need for further confirmation that inflation is sustainably on track to the 2.5% midpoint.
The decision reflects persistent uncertainty in the global economic environment and a domestic outlook characterised by robust labour market conditions but only gradual recovery in household demand, with risks on both sides of the inflation outlook.
The Board’s split vote and explicit data-dependent stance signal that future interest rate decisions will be highly sensitive to forthcoming inflation and labour market data, as well as evolving international developments.