The Reserve Bank of Australia (the central bank) lowered its key policy interest rate again by 25bp this week (after similar moves in June and July) to a record low of 0.75%, in a bid to boost the faltering economy. Real GDP had posted the weakest annual growth in a decade in Q2 2019 while inflation expectations have remained low. Last week, the central bank of the Philippines (BSP) had cut its main policy interest rate also for the third time this year, by 25bp to 4%. That cut was prompted by rapidly easing inflation (1.7% y/y in August) and disappointing growth momentum. Annual real GDP growth hit a four-year low of +5.5% y/y in Q2 and the manufacturing PMI edged down to 51.8 points in September (compared to an average 53.4 since the survey began in January 2016). Meanwhile, the Bank of Thailand (BoT) kept its policy rate unchanged at 1.5% last week, after it had cut by 25bp to 1.5% in August. Inflation in Thailand fell to 0.5% y/y in August, below the BoT’s target range of 1%-4%. We expect further monetary easing to be likely in Australia and the Philippines but less likely in Thailand.
