Forex News
- WTI inches lower amid oversupply concerns as OPEC+ considers resuming output hikes from April.
- Oil prices may regain ground as US–Iran tensions heighten ahead of renewed nuclear talks in Geneva.
- Iran held drills in the Strait of Hormuz, which handles about 20% of global Oil flows.
West Texas Intermediate (WTI) Oil price edges lower after registering over 1.5% gains in the previous session, trading around $63.50 during the Asian hours on Tuesday. Crude Oil prices may remain under pressure due to oversupply concerns.
OPEC+ (Organization of the Petroleum Exporting Countries and allies) is leaning toward resuming output increases from April after a three-month pause, in preparation for peak summer demand, per Reuters. Trading activity in Asia may stay subdued, with markets in China, Hong Kong, Singapore, Taiwan, and South Korea closed for Lunar New Year holidays.
However, Oil prices may regain ground amid mounting supply risks as tensions escalate between the United States (US) and Iran ahead of renewed nuclear talks in Geneva. Tehran conducted maritime drills in the Strait of Hormuz, which accounts for roughly 20% of global Oil shipments, after Washington deployed a second aircraft carrier to the region.
Iran’s atomic chief signaled Tehran could dilute its most highly enriched uranium in exchange for a full lifting of financial sanctions. Meanwhile, US President Donald Trump said he would be involved “indirectly” in the Geneva talks, expressing confidence that Tehran is willing to reach an agreement.
At the same time, US-led discussions between Russia and Ukraine are set to begin Tuesday, though markets remain skeptical about any near-term diplomatic breakthrough.
WTI Oil FAQs
WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media.
Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.
The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.
OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.
- EUR/USD trades with a negative bias for the second straight day, though it lacks bearish conviction.
- The USD preserves the overnight modest gains, while reviving ECB rate cut bets undermine the EUR.
- Traders, however, seem reluctant and opt to wait for this week’s important releases from the US.
The EUR/USD pair attracts some sellers for the second consecutive day on Tuesday and hovers below mid-1.1800s amid a relatively quiet trading action during the Asian session. The broader fundamental backdrop, however, warrants some caution for bearish traders before positioning for deeper losses.
The US Dollar Index (DXY), which tracks the Greenback against a basket of currencies, preserves the overnight modest gains and holds steady above the 97.00 mark, which, in turn, exerts some downward pressure on the EUR/USD pair. The shared currency, on the other hand, is undermined by a gradual shift toward the possibility of a rate cut by the European Central Bank (ECB), bolstered by a fall in the Eurozone inflation to the lowest level since September 2024.
The upside for the USD, however, is more likely to remain capped on the back of dovish US Federal Reserve (Fed) expectations. In fact, traders ramped up bets that the US central bank will lower borrowing costs in June following the release of softer US consumer inflation figures last Friday. This comes amid concerns about the Fed's independence, which might hold back the USD bulls from placing aggressive bets and help limit the downside for the EUR/USD pair.
Adding to this, the underlying bullish sentiment might cap the safe-haven buck. Traders might also opt to wait for more cues about the Fed's rate-cut path before placing fresh directional bets. Hence, the focus will remain glued to the FOMC minutes on Wednesday. Apart from this, the Advance US Q4 GDP report, the US Personal Consumption Expenditure (PCE) Price Index, and the global flash PMIs would provide a fresh impetus during the latter part of the week.
US Dollar Price This week
The table below shows the percentage change of US Dollar (USD) against listed major currencies this week. US Dollar was the strongest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.23% | 0.22% | 0.34% | 0.21% | 0.16% | 0.07% | 0.15% | |
| EUR | -0.23% | -0.01% | 0.11% | -0.02% | -0.09% | -0.13% | -0.07% | |
| GBP | -0.22% | 0.00% | -0.15% | -0.01% | -0.08% | -0.15% | -0.06% | |
| JPY | -0.34% | -0.11% | 0.15% | -0.11% | -0.16% | -0.26% | -0.12% | |
| CAD | -0.21% | 0.02% | 0.01% | 0.11% | -0.11% | -0.14% | -0.05% | |
| AUD | -0.16% | 0.09% | 0.08% | 0.16% | 0.11% | -0.07% | 0.02% | |
| NZD | -0.07% | 0.13% | 0.15% | 0.26% | 0.14% | 0.07% | 0.09% | |
| CHF | -0.15% | 0.07% | 0.06% | 0.12% | 0.05% | -0.02% | -0.09% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
- GBP/USD remains depressed for the second consecutive day amid a modest USD uptick.
- Investors now look forward to the UK monthly employment details for a fresh impetus.
- The focus will then shift to the release of the UK CPI and FOMC minutes on Wednesday.
The GBP/USD pair trades with a negative bias for the second straight day, though it lacks bearish conviction and holds above the 1.3600 mark through the Asian session on Tuesday. Traders now look forward to the release of the UK monthly jobs report, which will influence the British Pound (GBP) and provide some impetus to the currency pair.
The report published by the UK Office for National Statistics is expected to show continued softening in the UK labour market at the start of 2026. The number of people claiming jobless benefits is seen rising to 22.8K in January, from 17.9K in the previous month, while the Unemployment Rate is anticipated to hold steady at a nearly two-year high level of 5.1% during the three months to December. The focus will further be on wage growth data, with regular pay (excluding bonuses) and total earnings (including bonuses) both seen moderating during the reported period.
The crucial data will be followed by the latest UK consumer inflation figures on Wednesday, which would influence expectations about the Bank of England's (BoE) policy outlook amid bets for a 25 basis points (bps) rate cut in March. This, in turn, will play a key role in driving the British Pound (GBP). Apart from this, traders will take cues from the FOMC Minutes on Wednesday for more clues about the Federal Reserve's (Fed) rate-cut path. The outlook, in turn, will drive the US Dollar (USD) demand in the near term and provide some meaningful impetus to the GBP/USD pair.
Furthermore, the release of UK monthly Retail Sales data on Friday, along with flash PMIs from the UK and the US, might also contribute to infusing volatility during the latter part of the week. In the meantime, last Friday's softer US consumer inflation figures lifted odds that the US central bank will lower borrowing costs in June. Adding to this, traders have been pricing in the possibility of at least two Fed rate cuts in 2026, which, along with threats to the central bank's independence, might hold back the USD bulls from placing aggressive bets and act as a tailwind for the GBP/USD pair.
Economic Indicator
Claimant Count Change
The Claimant Count Change released by the UK Office for National Statistics presents the change in the number of unemployed people in the UK claiming benefits. There is a tendency for the metric to influence GBP volatility. Usually, a rise in the indicator has negative implications for consumer spending and economic growth. Generally, a high reading is seen as bearish for the Pound Sterling (GBP), while a low reading is seen as bullish.
Read more.Next release: Tue Feb 17, 2026 07:00
Frequency: Monthly
Consensus: 22.8K
Previous: 17.9K
Source: Office for National Statistics
The change in the number of those claiming jobless benefits is an early gauge of the UK’s labor market. The figures are released for the previous month, contrary to the Unemployment Rate, which is for the prior one. This release is scheduled around the middle of the month. An increase in applications is a sign of a worsening economic situation and implies looser monetary policy, while a decrease indicates improving conditions. A higher-than-expected outcome tends to be GBP-bearish.
- Gold trades nearly 0.7% lower as trading volumes stayed thin due to market holidays in China and other parts of Asia.
- Gold losses may be limited as softer US CPI boosts expectations of two Fed rate cuts this year.
- Safe-haven demand for yellow metal may rise after Iran drills in the Strait of Hormuz amid renewed US tensions.
Gold price (XAU/USD) extends its losses for the second successive session, trading around $4,930 per troy ounce during the Asian hours on Tuesday. Gold price is trading nearly 0.7% lower at the time of writing as trading volumes stayed thin due to market holidays across China, Hong Kong, and other parts of Asia.
However, losses in the non-yielding metal may be limited after as softer United States (US) Consumer Price Index (CPI) data for January strengthened expectations that the Federal Reserve (Fed) could implement two 25-basis-point rate cuts later this year.
According to the CME Group’s FedWatch tool, markets now price in roughly a 52% probability of a 25-basis-point rate reduction in June and 44% in July. Traders now turn to the Fed Meeting Minutes, Q4 GDP data, and the Fed’s preferred core PCE price index later this week for clearer guidance on the monetary policy outlook.
January’s US Nonfarm Payrolls (NFP) posted the strongest growth in more than a year, and the Unemployment Rate unexpectedly edged lower, signaling a stabilizing labor market. Still, caution prevails as the Federal Reserve’s preferred inflation measure, the Personal Consumption Expenditures (PCE) Price Index, continues to run closer to 3% than its 2% objective, with disinflation progress uneven since mid-2025.
Safe-haven demand for Gold may strengthen amid rising tensions between the United States and Iran ahead of a second round of talks. Tehran on Monday conducted maritime drills in the Strait of Hormuz after Washington deployed a second aircraft carrier to the region, as both sides prepare to resume nuclear negotiations on Tuesday.
Meanwhile, US-led discussions between Russia and Ukraine are also scheduled to start Tuesday, though markets remain doubtful about any meaningful diplomatic breakthrough in the near term.
Gold FAQs
Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
- USD/JPY meets with a fresh supply on Tuesday and stalls the previous day’s positive move.
- The divergent BoJ-Fed expectations offer some support to the JPY amid intervention fears.
- The USD struggles to lure buyers and contributes to the pair’s slide during the Asian session.
The USD/JPY pair struggles to capitalize on the previous day's positive move and attracts some intraday sellers near the 153.75 resistance zone during the Asian session on Tuesday. Spot prices touch a fresh daily low around the 153.25-153.20 area in the last hour, though the downtick lacks bearish conviction.
Traders remain on high alert amid the possibility of a coordinated Japan-US intervention to stem weakness in the Japanese Yen (JPY). Moreover, the diverging interest rate paths between the Bank of Japan (BoJ) and the US Federal Reserve (Fed) contribute to capping the upside for the USD/JPY pair. However, Monday's disappointing release of Japan's Q4 GDP might have reduced urgency for the BoJ to tighten further, which might hold back the JPY bulls from placing aggressive bets.
Adding to this, the prevailing risk-on environment might keep a lid on the safe-haven JPY and act as a tailwind for the USD/JPY pair. That said, any meaningful appreciation for the currency pair still seems elusive as dovish Fed expectations, along with threats to the central bank's independence, fail to assist the US Dollar (USD) in attracting any meaningful buyers. Traders might also opt to wait for more cues about the Fed's rate-cut path before positioning for the next leg of a directional move.
Hence, the focus will remain glued to the release of the FOMC minutes on Wednesday. This week's US economic docket also features Durable Goods Orders and housing market data. Apart from this, the global flash PMIs and speeches from influential FOMC members could provide some meaningful impetus to the USD/JPY pair during the latter part of the week. Nevertheless, the broader fundamental backdrop suggests that the path of least resistance for spot prices is to the downside.
Japanese Yen FAQs
The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors.
One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The BoJ ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence between the Bank of Japan and other main central banks. More recently, the gradually unwinding of this ultra-loose policy has given some support to the Yen.
Over the last decade, the BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar against the Japanese Yen. The BoJ decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts in other major central banks, is narrowing this differential.
The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.
- Australian Dollar stays weak after RBA Meeting Minutes cite stronger data, persistent inflation, and looser financial conditions.
- RBA policymakers emphasized data reliance, no preset rate path; members warned inflation may stay above target without action.
- The US Dollar may weaken as softer January CPI boosts expectations of potential Fed rate cuts later this year.
AUD/USD edges lower after posting minute gains in the previous session, trading around 0.7070 during the Asian hours on Tuesday. The pair remains subdued following the release of the Reserve Bank of Australia (RBA) Meeting Minutes, which suggested that February’s rate increase was prompted by stronger-than-anticipated economic data, persistent broad-based inflation, and looser financial conditions.
RBA policymakers highlighted their reliance on incoming data and stressed that there is no predetermined path for rates. Members concurred that without a policy response, inflation would likely remain above target for an extended period.
Reserve Bank of Australia Governor Michele Bullock had previously indicated that a renewed acceleration in inflation left the central bank with limited room but to tighten policy. Bullock noted that the resilience in consumer spending and business investment had come as a surprise to the board.
Traders will now turn their focus to Australia’s Wage Price Index for Q4 2025, scheduled for release on Wednesday, followed by January’s labour market report on Thursday. Both releases are expected to provide additional insight into the RBA’s monetary policy trajectory and the broader health of the economy.
The AUD/USD pair also struggles as the US Dollar (USD) steadies after posting modest gains on Monday. However, the Greenback may face challenges as softer January Consumer Price Index (CPI) data reinforced expectations that the Federal Reserve (Fed) may cut rates later this year. Traders now shift focus to the latest Fed Meeting Minutes, Q4 GDP figures, and the Fed’s preferred core PCE price index for clearer direction on the monetary policy outlook.
January’s US Nonfarm Payrolls recorded the largest increase in over a year, while the Unemployment Rate unexpectedly declined, pointing to a stabilizing labor market. However, sentiment remains cautious as the Federal Reserve’s preferred inflation gauge, the Personal Consumption Expenditures (PCE) Price Index, has been tracking closer to 3% than its 2% target, with disinflation progress proving uneven since mid-2025.
Australian Dollar Price Today
The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies today. Australian Dollar was the weakest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.09% | 0.08% | -0.14% | 0.04% | 0.12% | 0.08% | 0.07% | |
| EUR | -0.09% | -0.01% | -0.24% | -0.05% | 0.03% | -0.01% | -0.01% | |
| GBP | -0.08% | 0.01% | -0.21% | -0.03% | 0.05% | 0.00% | -0.00% | |
| JPY | 0.14% | 0.24% | 0.21% | 0.18% | 0.26% | 0.21% | 0.21% | |
| CAD | -0.04% | 0.05% | 0.03% | -0.18% | 0.08% | 0.04% | 0.03% | |
| AUD | -0.12% | -0.03% | -0.05% | -0.26% | -0.08% | -0.04% | -0.05% | |
| NZD | -0.08% | 0.00% | -0.01% | -0.21% | -0.04% | 0.04% | -0.01% | |
| CHF | -0.07% | 0.01% | 0.00% | -0.21% | -0.03% | 0.05% | 0.01% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote).
The Reserve Bank of Australia (RBA) published the Minutes of its February monetary policy meeting this Tuesday, which showed that the rate hike was driven by stronger-than-expected data, persistent broad-based inflation, and easing financial conditions. Furthermore, policymakers emphasised data dependence and no preset rate path.
Additional takeaways
The board judged risks to inflation and employment had “shifted materially”, strengthening the case for a February hike.
Members agreed inflation would likely stay above target too long without a policy response.
Cash rate lifted 25bp to 3.85%; holding was considered, but hike deemed stronger option.
No preset path for rates; future decisions are explicitly data dependent.
Demand exceeding supply, labour market still tight, financial conditions seen as having eased.
Market reaction
The AUD/USD pair moves little following the release and currently trades around the 0.7070-0.7065 region, down just over 0.10% for the day.
RBA FAQs
The Reserve Bank of Australia (RBA) sets interest rates and manages monetary policy for Australia. Decisions are made by a board of governors at 11 meetings a year and ad hoc emergency meetings as required. The RBA’s primary mandate is to maintain price stability, which means an inflation rate of 2-3%, but also “..to contribute to the stability of the currency, full employment, and the economic prosperity and welfare of the Australian people.” Its main tool for achieving this is by raising or lowering interest rates. Relatively high interest rates will strengthen the Australian Dollar (AUD) and vice versa. Other RBA tools include quantitative easing and tightening.
While inflation had always traditionally been thought of as a negative factor for currencies since it lowers the value of money in general, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Moderately higher inflation now tends to lead central banks to put up their interest rates, which in turn has the effect of attracting more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in the case of Australia is the Aussie Dollar.
Macroeconomic data gauges the health of an economy and can have an impact on the value of its currency. Investors prefer to invest their capital in economies that are safe and growing rather than precarious and shrinking. Greater capital inflows increase the aggregate demand and value of the domestic currency. Classic indicators, such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can influence AUD. A strong economy may encourage the Reserve Bank of Australia to put up interest rates, also supporting AUD.
Quantitative Easing (QE) is a tool used in extreme situations when lowering interest rates is not enough to restore the flow of credit in the economy. QE is the process by which the Reserve Bank of Australia (RBA) prints Australian Dollars (AUD) for the purpose of buying assets – usually government or corporate bonds – from financial institutions, thereby providing them with much-needed liquidity. QE usually results in a weaker AUD.
Quantitative tightening (QT) is the reverse of QE. It is undertaken after QE when an economic recovery is underway and inflation starts rising. Whilst in QE the Reserve Bank of Australia (RBA) purchases government and corporate bonds from financial institutions to provide them with liquidity, in QT the RBA stops buying more assets, and stops reinvesting the principal maturing on the bonds it already holds. It would be positive (or bullish) for the Australian Dollar.
Commerzbank’s Lay and Lim discuss speculation that the PBoC may pivot toward using the overnight repo rate as its main policy tool, further aligning with the Federal Reserve’s framework. They note strong January credit growth driven by seasonal factors and front‑loaded government bond issuance.
Policy pivot talk as Yuan firms
"Speculation is mounting that the People’s Bank of China (PBOC) may pivot toward the overnight repurchase rate as its primary policy tool. This will further align its framework with the US Federal Reserve. This sentiment intensified after the PBOC’s latest monthly report prioritized money market developments over bond market analysis and introduced a direct comparison between overnight repo rates and the 7-day reverse repo rate (7D RRP)."
"Such a shift builds on a previous quarterly pledge to stabilize short-term rates around the policy target and continues the trend of anchoring policy to shorter tenors."
"In 2024, the PBOC formally designated the 7D RRP as its primary policy rate, replacing the medium-term lending facility. A further shift toward the overnight repo rate would represent the next step in this evolution and align China’s operational framework more closely with global peers, particularly the Federal Reserve."
"Credit growth was strong in January and rose to CNY4.7tn vs CNY5.1tn in the same period in 2025. This was largely due to strong seasonal effects, as banks sought to extend loans to fulfill newly allocated loan quotas. However, household and business sector loan growth remained muted, signaling a soft credit demand growth and persistently weak economic sentiment."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
UOB Global Economics & Markets Research highlights that Malaysia’s final 4Q25 GDP grew 6.3% year‑on‑year, the fastest since 4Q22, lifting full‑year 2025 growth to 5.2%, above the official 4.0%–4.8% range. Growth was driven by domestic demand, exports, tourism and AI‑related tech. UOB expects real GDP to slow to 4.5% in 2026 and Bank Negara Malaysia to keep the OPR at 2.75%.
Robust 2025 gives way to slower 2026
"Malaysia’s final 4Q25 GDP surprised on the upside, growing 6.3% y/y (advance est: +5.7%; 3Q25: revised upwardly to +5.4% from +5.2%), the fastest quarterly expansion since 4Q22."
"For the full year of 2025, Malaysia’s economy expanded by 5.2%, slightly above the 5.1% growth recorded in 2024 and well above the official forecast range of 4.0%–4.8% and the 4.9% advance estimate."
"We expect real GDP growth to moderate to 4.5% in 2026 (MOF est: 4.0%-4.5%) amid persistent external uncertainties and base effects."
"We anticipate Bank Negara Malaysia (BNM) to maintain the Overnight Policy Rate (OPR) at 2.75% through 2026."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
BNY analysts expect Bank Indonesia (BI) to keep its policy rate unchanged at 4.75% (February 19) and maintaining an easing bias but with a high bar for further cuts. The bank highlights BI’s shift away from an “all-out pro-growth” stance toward Rupiah stability, including potential large FX interventions. Elevated lending rates and administrative measures like nickel output cuts support currency valuations.
On-hold BI with FX stability focus
"We expect Bank Indonesia to keep its policy rate unchanged at 4.75%."
"While BI is likely to retain an easing bias, the bar for further rate cuts remains high."
"Notably, recent communication has dropped references to an “all-out pro-growth” stance, with greater emphasis instead on rupiah stability, including the possibility of very large FX interventions (versus earlier references to “bold” interventions)."
"BI is expected to continue asserting vigilance amid ongoing volatility in local assets."
"However, such a step can be seen as another tool to help support currency valuations – an administrative measure rather than direct intervention – and its impact takes time to feed through and is often overlooked initially."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
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