Southeast Asian Central Bank Rates Expected to Peak Soon, Says Bloomberg

Bloomberg sees interest rates in Southeast Asian countries are about to reach a peak, as central banks are getting close to their goal of taming inflation through large-scale rate hikes. Economists, meanwhile, expect the tightening cycle to end after 25–50 basis points are added this quarter.

According to the consensus estimate by Bloomberg, policymakers in Indonesia, the Philippines, and Thailand are likely to boost rates by a combined half percentage over the next few months before reaching their peak.

Many analysts anticipate an end to rate hikes in Southeast Asia this quarter due to cooler inflation in the US leaving the Federal Reserve on pace to downshift to a quarter-point move at its next meeting. That could help fiscal policymakers as they try to maintain growth amid worries of recession in some major economies.

For Thailand, analysts believe the country would keep with its policy of “gradual and measured” rate rises so as not to disrupt the recovery pushed on by the revived tourism industry. Last month, Bank of Thailand assistant governor Piti Disyatat signaled that if the economy and inflation reach a balance point by the end of the year, the tightening cycle in Thailand could come to an end.