Latest News Stream - Interest Rate

Banxico lowered its benchmark interest rate by 25 bps to 6.25% at its November 2026 meeting, defying market expectations for a hold. The Governing Board noted that the disinflation process had continued and judged that, amid prevailing economic slack, exchange rate movements would have a limited pass-through to consumer prices. It also highlighted the absence of demand-side inflationary pressures and noted that the monetary restriction already implemented remained in place. Looking ahead, the Board indicated that keeping rates at the newly reached level for an extended period would support inflation convergence towards its target and help address external macroeconomic challenges. Meanwhile, headline inflation forecasts were revised upward for Q4 2026, while core inflation projections were adjusted slightly higher. Despite these revisions, headline inflation is still expected to converge to the 3% target in Q4 2027.

The National Bank of Moldova raised its benchmark interest rate by 200 basis points to 11% in November 2026, lifting borrowing costs to their highest level since April 2023, citing intensifying inflationary pressures and mounting risks to price stability. Headline inflation accelerated to 8.60% in September from 6.96% in August, moving above the upper limit of the central bank’s 5% ±1.5 percentage point target range. Meanwhile, domestic demand remained robust, with new loans to individuals in MDL up 10.5%, retail trade up 16.4% in July-August, and remittances from abroad up 26.44% in September. Economic activity also showed positive trends in the third quarter, supported by agriculture and industry. Looking ahead, inflation is expected to keep rising through the end of 2026 before easing and returning to the target range in the third quarter of 2027, with the forecast revised higher on expected regulated tariff adjustments and higher fuel prices.

The Czech National Bank raised its repo rate by 25 basis points to 4% at its November 2026 meeting, as expected, marking the highest level in borrowing costs since early 2025. Headline inflation eased slightly to 2.4% in October from 2.5% in September, according to preliminary estimates. However, strong domestic demand, higher energy prices and food costs continue to pose upside risks. Although inflation remains within the CNB’s 1%-3% tolerance range, it is expected to peak at an average of 3.5% in the first quarter of 2027 and then resume its decline. With price stability remaining the central bank’s priority, core inflation also remains a concern, having reached 3.1% in September, above the upper end of its tolerance range. The CNB raised its inflation forecast to 2.1% for 2026 and 3.2% for 2027, while lowering its 2028 projection to 2.3%. Meanwhile, GDP growth is expected to slow to 1.7%, down from the previous 2.2% forecast, before recovering to 2.5% in both 2027 and 2028.

The central bank of Norway left its key policy interest rate steady at 4.5% at its November 2026 meeting, in line with market expectations, following a 25bps rate hike in the previous meeting in September. “Inflation is too high. It will likely be necessary to keep the policy rate elevated for a time, and we are prepared to raise the policy rate if needed to bring inflation down to target within a reasonable time horizon”, says Governor Ida Wolden Bache. Policymakers also added that inflation remains markedly above target, and the rapid rise in business costs in recent years will likely contribute to keeping inflation elevated ahead. The Committee has not received information indicating that the outlook for the Norwegian economy has changed materially since its monetary policy meeting in September.

Bank Negara Malaysia kept its overnight policy rate (OPR) unchanged at 2.75% for an eighth consecutive meeting in November 2026, in line with market expectations. The Monetary Policy Committee (MPC) said the current policy stance remains supportive of price stability and sustainable economic growth. Headline and core inflation averaged 1.8% and 1.9%, respectively, from January to October 2026, while geopolitical tensions, elevated global commodity prices and adverse weather conditions are expected to exert upward pressure on inflation in 2027. Meanwhile, recent indicators point to continued economic strength in the third quarter of 2026, underpinned by robust export performance and sustained domestic demand. The solid momentum is expected to lift full-year growth to above 5%. The MPC reiterated that it will remain vigilant to evolving economic conditions and assess their implications for the balance of risks surrounding the domestic inflation and growth outlook.

It was appropriate for the Bank of Japan to continue raising interest rates and adjust the degree of monetary accommodation in response to developments in the economy, prices, and financial conditions, according to its September meeting minutes. Members agreed that the timing and pace of further adjustments should be determined by assessing the likelihood of achieving the central bank’s baseline economic and inflation outlook, while monitoring risks such as the impact of the situation in the Middle East, expanding AI-related demand, and forex movements. They also stressed the growing importance of stabilising underlying CPI inflation around the 2% target to prevent an upward deviation that could hurt the economy. One member noted that monetary policy had entered a new phase, shifting from encouraging higher underlying inflation toward ensuring price stability through flexible responses to domestic and overseas economic developments, including exchange-rate-driven price pressures.

The Bank of Albania kept its benchmark interest rate unchanged at 2.5% at its November 2026 meeting, as policymakers considered the current monetary stance appropriate amid solid economic growth and inflation close to target. Inflation eased to 2.9% in September, down from 3.2% in August, following a slowdown in rental price increases, although higher agricultural and food prices continued to exert pressure. Economic activity remained robust, with GDP growing 3.6% in the first half of 2026, supported by consumption, investment, exports and rising employment and wages. Credit growth also remained strong at 15.5% in Q3. The central bank expects inflation to temporarily exceed its 3% target due to higher energy prices and external inflationary pressures, before returning to target in 2028. However, geopolitical tensions and uncertainty over the new fiscal package pose risks. Future policy decisions will depend on inflation, external conditions and price stability risks.

The National Bank of Poland left its reference policy rate unchanged at 3.75% at its November 2026 meeting, its lowest level since 2022, in line with market expectations and marking the seventh consecutive meeting at this level. The decision came as headline inflation slowed to 3.5% in October, its lowest reading since August, from 4.1% in September, returning to the upper limit of the central bank’s target of 2.5±1% and coming in below market forecasts of 3.7%, as government measures lowered fuel prices at the pump. Still, energy prices continued to rise on higher heating costs, and inflation remains above the 2.5% midpoint of the target. Policymakers stayed cautious, with future decisions depending on inflation and incoming data.

The Central Bank of Uzbekistan left its benchmark interest rate at 14% in November 2026, maintaining a tight monetary stance amid persistent inflationary pressures. Annual inflation accelerated to 6.4% in September, compared with 6.2% a month earlier, while core inflation stood at 5.5%. Policymakers remain concerned about robust domestic consumption and uncertainty surrounding international food and energy prices, which could add to price pressures. Despite some moderation in inflation expectations, the overall outlook continues to warrant caution. The Central Bank projects inflation at approximately 7% by the end of 2026, with a further slowdown towards its 5% objective by the end of 2027. At the same time, economic growth remained strong, with GDP increasing 8.3% year-on-year in the first nine months of 2026. The decision to maintain borrowing costs unchanged reflects the Bank's continued focus on bringing inflation down while preserving economic stability.

The Central Bank of the Republic of Azerbaijan kept its discount rate unchanged at 6.5% for a fifth consecutive meeting on October 29, 2026, maintaining borrowing costs at their lowest level since September 2021. The lower and upper limits of the interest rate corridor were also held at 5% and 7.5%, respectively. The decision came as annual inflation eased to 5.5% in September from 5.7% in August, remaining within the central bank's 4% ± 2 percentage-point target range, while core inflation stood at 4.9%. The bank expects inflation to reach 5.9% by the end of both 2026 and 2027. Meanwhile, strong foreign currency supply and favorable external balances supported the manat, with foreign exchange reserves rising 33.4% to $15.4 billion in the first nine months of the year. The central bank said future decisions will depend on inflation trends, macroeconomic developments and foreign exchange market conditions. The next policy announcement is scheduled for December 23.

The National Bank of North Macedonia left its key interest rate unchanged at 4.25% at its November 2026 meeting, citing high uncertainty and unpredictability in the external environment. Policymakers stated that more time was needed to assess the sustainability of the stable exchange rate, particularly given the conflict in the Middle East and the war in Ukraine, which pushed energy prices higher. Headline inflation edged up to 2.7% in September from 2.6% in August, amid higher global energy prices that accelerated the energy component, while food prices also picked up. Meanwhile, the domestic economy remained resilient, with real GDP growth reaching 3.7% in the first half of 2026. Looking ahead, the NBNM stated it would continue to aim for stability of the denar against the euro to ensure price stability in the medium term, while closely monitoring domestic and international economic and financial developments.

The National Bank of Ethiopia kept its key interest rate unchanged at 16% on November 3, 2026, maintaining a restrictive monetary stance to curb persistent inflationary pressures and restore price stability. Policymakers said that although headline inflation eased to 14.9% in September from its previous peak of 15.3% in July, it remains far above the Bank’s single-digit goal. The Bank highlighted persistent price pressures largely driven by supply-side factors, including higher energy costs and the impact of the Middle East conflict. Looking ahead, headline inflation is projected to resume a declining trend but remain in double digits over the next six months. Meanwhile, economic activity continued to show strong momentum in the first quarter of FY2026/27, supported by improvements in industrial production, electricity generation, tourism and exports.

The Central Bank of Armenia raised its policy rate by 25 basis points to 7.0% at its November 2026 meeting, citing persistent inflationary pressures and strong domestic demand. The latest increase brought the benchmark rate to its highest level since January 2025. The deposit rate was increased to 5.5%, while the lending rate rose to 8.5%. Annual inflation in Armenia eased to 4.3% in September 2026, from 4.4% in August, marking the lowest level since May. Meanwhile, core inflation edged down to 4.7% in September, from 4.8% in the previous month.

The Central Bank of Colombia left its benchmark interest rate unchanged at 12.25% at its October 2026 meeting, in line with market expectations. The Board of Directors noted that annual inflation edged up to 6.3% in September, slightly below forecasts. Core inflation, meanwhile, declined from 6.1% in August to 6.0% in September. However, the El Niño weather phenomenon represents a significant upside risk to the outlook for food and regulated prices. Inflation expectations for December 2026 edged up to 6.9%. The Board also noted that Colombia’s annual economic growth is estimated to have slowed in the third quarter compared with the previous quarter. Domestic demand indicators point to weaker consumption growth in both the private and public sectors. The Board emphasized the importance of thoroughly reviewing the Economic Rescue Bill submitted to Congress, noting that the evolution of public finances is a key factor in future monetary policy decisions.