Asia Economic Diary:Dec 19-Jan 06

Next week will feature monetary policy meetings in Thailand, Philippines, and Taiwan; we expect all to keep rates on hold. In the Philippines and Thailand, inflation appears to have bottomed, but only seen to rise within their respective central bank’s target range, and thus unlikely to prompt rate moves by the monetary authorities. And after having delivered a total of 50bp rate cuts since 2015Q3, we expect Taiwan’s Central Bank of China to also remain on the sidelines next week through 2017. Rising inflation would leave real rates hovering around zero percent in Taiwan, and cutting rates further would only increase risks of financial imbalances given Taiwan’s high household leverage.