Archive

October 14, 2025
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MAS Holds Course on Tightening

  • MAS holds policy steady as Q3 GDP beats 2% consensus with 2.9% growth, core inflation at 0.5% for 2025.
  • The central bank is less dovish on 2026 easing as the output gap stays positive through 2025, near zero in 2026.
  • Tariff risks are contained as pharma exemptions are negotiated, and AI investments support manufacturing resilience.
October 09, 2025
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Peru Holds Rates Near Neutral at 4.25%

  • Peru held rates at 4.25% as expected, near its neutral level, with inflation at 1.4% approaching the target midpoint by year-end.
  • Policy pause reflects balanced risks: benign domestic inflation vs global trade restrictions weighing on medium-term growth outlook.
  • Future moves depend on inflation drivers, but immediate easing is unlikely given the proximity to the 2% neutral real rate estimate.
October 09, 2025
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BSP Delivers Unexpected Policy Easing

  • BSP cut rates 25bp to 4.75% surprising market expectations for a pause, citing a weakened growth outlook from infrastructure governance concerns.
  • Benign inflation at 1.7%, well below the 2-4% target, provides scope for accommodation despite electricity and rice tariff upside risks.
  • Further easing is likely in December as BSP signals the policy "sweet spot" is lower than expected amid persistent growth headwinds.
October 08, 2025
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RBNZ Cuts OCR to Stimulative 2.5%

  • The RBNZ cut its OCR by 50bps to 2.5%, beyond the 25bp consensus, with unanimous committee support signalling a more aggressive stance than August's split vote.
  • Inflation is forecast at 3% in Q3 but returns to 2% midpoint by H1 2026 due to spare capacity, providing scope for further easing.
  • The Committee remains open to additional cuts with the November meeting live, as terminal rate expectations fall below the previous neutral 3% estimate.

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