Daily Market Update

Tag: Monetary Policy

September 2025
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Russia’s GDP grew 1.1% in Q2 2025, sharply down from 4% a year earlier, according to early estimates. Last year’s growth was driven by surging defence spending despite Western sanctions, but the economy now faces cooling activity and rising recession risks. High interest rates to curb stubborn inflation are weighing on output. President Putin rejected claims that the Ukraine war is crippling the economy, citing low debt and diversification. After 4.3% growth in 2024, the central bank expects 1 to 2% this year, while the economy ministry may revise its 2.5% forecast.

August 14, 2025

Russia’s annual inflation eased for a fourth straight month to 8.8% in July 2025, the lowest since October 2024, from 9.4% in June. The slowdown matched the central bank’s view that early-year price pressures would not persist, though inflation remains well above the 4% target. Services posted the highest increase at 11.9%, followed by food at 10.8%, while non-food goods rose 4.1%. Core inflation was 8.5%. On a monthly basis, consumer prices rose 0.6%.

August 14, 2025

Serbia’s central bank cut its 2025 GDP growth forecast to 2.75% from 3.5%, citing weaker agricultural output, rising inflation, and lower investor confidence. For 2026 to 2027, it projects growth of 4 to 5%. President Vucic reiterated Serbia’s military neutrality and non-alignment with NATO, and announced early elections. He also confirmed there would be no constitutional changes to allow him another presidential term.

August 14, 2025

The Bank of Zambia held its key policy rate at 14.5% for the second straight meeting, seeking to consolidate progress in reducing inflation while managing global uncertainty.

August 14, 2025

In Azerbaijan, annual inflation was 5.0% in July, down from 6.0% the previous month. At the end of July, the central bank cut rates by 25 bps, the first rate cut since pausing its easing cycle more than a year ago.

August 13, 2025

South Africa’s central bank governor reiterated support for lowering the inflation target to 3% from the current 3%-6% band, despite opposition from the finance minister.

August 13, 2025

Brazil’s consumer prices rose 0.26% in July, below forecasts, with annual inflation slowing to 5.23%. The central bank is expected to maintain a restrictive policy stance into 2025.

August 13, 2025

Pakistan’s central bank injected PKR 1,004 bln rupees into the banking system via reverse repo and Shariah-compliant OMOs to support liquidity, accepting Rs 898 bln in 7–14 day repos at 11.04% and 106 bln in mudarabah-based OMOs.

August 12, 2025

Albania’s annual inflation rose to 2.5% in July 2025 from 2.4% in June, driven mainly by higher food and housing costs. The central bank kept interest rates unchanged at its meeting last week.

August 12, 2025

Kazakhstan’s central bank will raise reserve requirements for banks later this month, lifting the minimum reserve level to 3.5% for obligations in Kazakh tenge and 10% for hard currency. Further hikes are planned for 2026 to curb excessive money supply growth and strengthen monetary policy transmission.

August 12, 2025

Namibia’s central bank cut its 2025 GDP growth forecast to 3.5% from 3.8% on weaker agriculture, mining, and manufacturing outlooks. Drought has reduced livestock herds, while diamond and meat processing output are set to fall.

August 12, 2025

Lesotho secured a cut in US tariffs on its exports from 50% to 15% (effective 7 Aug), easing pressure on its textile sector. The government had sought 10% but will continue talks, citing lobbying efforts in Washington and negotiations with the US Embassy.

August 11, 2025

Uganda’s debut 25-year bond was oversubscribed, drawing UGX 851.1 bln (USD 238.7 mln) in bids versus UGX 500 bln offered, but the central bank rejected over 90% due to risk premium concerns. The bond extends Uganda’s debt maturity profile.

August 11, 2025

Albania’s central bank kept interest rates unchanged at its policy meeting, citing steady economic growth, low inflation, and strong financial stability. Governor Gent Sejko emphasized that current monetary policy supports growth and medium-term price stability, with inflation expected to return to target by early 2026.

August 8, 2025

Serbia’s central bank kept its key interest rate unchanged at 5.75%, prioritizing inflation control as annual inflation rose to 4.6% in June, above its upper target limit. Despite weaker economic growth due to political unrest and reduced investment, the bank expects activity to pick up later this year.

August 8, 2025

Mexico cut its key interest rate by 25 bps to 7.75%, citing improved disinflation and stronger Q2 growth, but emphasized a cautious outlook due to global uncertainty and peso risks.

August 8, 2025

India held its policy rate steady as expected, saying economic momentum remains solid, but warned of risks from upcoming 25% US tariffs and inflation pressures tied to food prices and energy imports from Russia.

August 8, 2025

President Trump and Russian President Putin are finalizing plans for a meeting in the coming days, with a venue agreed upon but not yet disclosed, it has been announced. However, the White House insists the meeting won’t proceed unless Putin also agrees to meet Ukrainian President Zelensky. Meanwhile, Ukraine’s foreign reserves fell to USD 43.0 bln in July from USD 45.1 bln in June, according to the central bank.

August 8, 2025

China posted a trade surplus of USD 98.2 bln in July 2025, lower than expected but higher YoY, as exports rose 7.2% and imports grew 4.1% amid temporary easing of tariff pressures and optimism around a renewed US-China trade truce.

August 7, 2025

India faced a new tariff threat from Donald Trump, who announced he would “substantially raise” duties on Indian exports in retaliation for India’s continued purchases and resale of Russian oil. The Indian rupee edged up to around 87.77 per USD, after the central bank kept its key policy rate unchanged, as expected, and maintained a “neutral” stance. This followed a surprise 50 bps rate cut in June. Governor Malhotra noted ongoing global trade challenges but said India’s economic outlook remains bright.

August 6, 2025

Armenia’s central bank left its benchmark interest rate unchanged at 6.75% during its August meeting, following a continued decline in headline inflation. In annual terms, inflation in Armenia slowed again to 3.4% in July from 3.9% the previous month, which is the lowest reading since April.

August 6, 2025

Kenya’s FX reserves rose sharply to a record USD 10.1 bln after a USD 900 mln Eurobond buyback was undersubscribed, leaving the Treasury with surplus funds from a separate USD 1.5 bln issuance.

August 6, 2025

India’s rupee depreciated past 87.7 per USD, nearing record lows, after Trump imposed 25% tariffs and threatened more unless India stops re-exporting Russian energy. Inflation fell to 2.1%, increasing expectations of further RBI rate cuts.

August 5, 2025

Tajikistan’s central bank has lowered its policy rate by 50 bps to 7.75%, citing reduced inflation and a stronger currency. The Eurasian Development Bank expects this decision will help keep inflation within the target range, and expects a gradual decline in inflation this year. Meanwhile, the share of monetary gold in Tajikistan’s international reserves has risen to 20%, which the central bank says exceeds acceptable levels, meaning it now plans for greater diversification and improved reserve management.

August 5, 2025

Pakistan needed to arrange USD 10 bln in net financing for FY26, with USD 25.9 bln in total debt servicing needs; FX reserves were projected to reach USD 15.5 bln by end-2025 and USD 17.5 bln by June 2026.

August 4, 2025

Kazakhstan’s annual inflation was 11.8% in July, in line with the previous month. The next central bank meeting is set for August 29, and while consensus expectation is currently for the central bank to hold interest rates, there is a chance of the NBK hiking, in an effort to contain pass-through to inflation from the current currency weakness in Kazakhstan. Further, the current account deficit widened by USD 1.2 bln to reach USD 2.8 bln in 2Q25, mainly due to a seasonal increase in imports.

August 4, 2025

In its monthly FX market update for July, the Kazakh central bank stated it sold USD 125.6 mln in direct FX interventions (on July 30), as well as USD 700 mln of hard currency sales from the oil fund, and USD 540 mln in sterilization operations to offset domestic gold purchases. During July, the central bank also bought around USD 32 mln for the state pension fund. The NBK has also announced it plans to sell USD 400-500 mln from the oil fund in August, as well as USD 540 mln in gold sterilization, with no plans to buy FX for the pension fund. This would mean net FX sales in August are set to reduce to around USD 1 bln in monthly terms.

August 4, 2025

Zambia’s inflation fell to 15.3% YoY in July, the lowest since 2023, driven by easing food prices and a 21% appreciation of the Kwacha YTD. The slowdown in inflation and strong real yields have fueled expectations of a rate cut from the current 14.5% at the next MPC meeting. However, the World Bank warned that Zambia has yet to meet conditions for a second DPO loan, including regulations for the Conflict of Interest and Social Protection Acts. Delays in reform have raised risks to concessional funding access.

August 4, 2025

Colombia’s central bank held its policy rate at 9.25% in June, with a divided vote: 4 for a hold, 2 for a 50 bps cut, and 1 for 25 bps. Inflation eased to 4.8% from 5.1% in May, led by declines in food and electricity prices. Core inflation remained at 4.8%. May’s economic activity rose 2.7% YoY, driven by services, while Q2 GDP is estimated to have grown 2.7% (annualized), fueled by a 4.1% rise in domestic demand. External conditions remain tight, and the Board reiterated a data-dependent approach amid lingering global trade and geopolitical risks.

August 4, 2025

Kenya’s inflation rose to 4.1% in July from 3.8% in June, driven by higher food costs; the central bank expects inflation to stay below its 5% midpoint target through March 2026.

August 1, 2025
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