- We expect the PBOC to keep the 1Y LPR unchanged at 3.00%.
- Bank Indonesia is expected to the benchmark rate unchanged at 5.75%.
- Singapore’s and Hong Kong’s CPIs should have edged up to 2.3% YoY and 1.8% in August respectively.
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CENTRAL BANK MEETINGS
People Bank of China (21 Sep)
We expect the PBOC to keep the 1Y LPR unchanged at 3.00%, maintaining a measured easing stance as resilient exports and industrial activity continue to support growth. Industrial production growth accelerated from 4.5% yoy in July to 5.2% in August, buoyed by strong exports despite soft domestic demand. High-tech manufacturing expanded by 16.7% yoy, supported by the regional AI and electronics upcycle. Domestic momentum, however, remains uneven. Retail sales growth slowed from 0.6% yoy in July to 0.4% in August, weighed down by weaker purchases of big-ticket items, including luxury goods, automobiles and furniture. Elevated precautionary savings and falling property prices continued to constrain household consumption. Investment conditions also deteriorated, with the fixed asset investment contraction widening from 6.7% yoy ytd in July to 7.2% in August. State-owned and private investment fell by 3.6% and 10.1% yoy, respectively, while property investment declined by 19.9% yoy ytd as developers prioritised completions over new starts. Against this backdrop, policymakers are likely to maintain a measured policy stance, relying on targeted fiscal support to sustain growth rather than further rate cuts.
Bank Indonesia (23 Sep)
Bank Indonesia is expected to the benchmark rate unchanged at 5.75% this month. New Governor Destry is likely to highlight tighter global financial conditions, and geopolitical risks as key risks of the horizon, while the domestic economy continues to be relatively resilient. After a considerable period of volatility in first half of the year, USDIDR has been rangebound this quarter, lowering the need for currency-driven hikes. The incoming Finance Minister’s past statements also point to a continued preference for fiscal prudence rather than fiscal activism. We expect broad adherence to fiscal thresholds, a preference to reallocate expenditure than to boost borrowings, and build buffers in the math to absorb unexpected shocks, to add to macro stability. Inflation is off its back, but still within the BI’s target range. Against this backdrop and despite US Fed’s hike, we expect Indonesia’s policymakers to exhibit limited urgency to tighten policy at this juncture.
FORTHCOMING DATA RELEASES
Hong Kong SAR
Export growth is expected to accelerate from 50.7% yoy in July to 53.2% in August, in line with the pickup in China's export growth from 23.9% yoy to 25.0% over the same period. Trade momentum remains robust, supported by strong demand for AI-related electronics. Import growth is also expected to stay firm, reflecting sustained demand for intermediate and capital goods amid resilient export orders and gradually improving investment sentiment.
On the inflation front, CPI is projected to edge up from 1.7% yoy in July to 1.8% in August, supported by improving consumption sentiment. The overall diffusion index strengthened during the month, driven by gains in the retail trade and restaurant sub-indices. Mainland visitor arrivals increased by 13.3% yoy in August on a daily average basis, providing further support to domestic consumption. Renewed Middle East conflict during the month will also provide upward pressure to headline CPI.
Singapore
We expect Singapore’s core and headline inflation to rise slightly to 2.1% yoy and 2.3% yoy, respectively, in August 2026, from 2.0% yoy and 2.2% yoy in July. The inflation readings likely reflected the continued lagged impact from higher global energy prices, such as a positive contribution from elevated electricity & gas price increases for a second consecutive month, and high transport inflation, while food inflation likely firmed. However, low albeit slightly rising accommodation cost increases and contained domestic services inflation should limit the overall increase in price pressures.
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The information herein is published by DBS Bank Ltd and/or DBS Bank (Hong Kong) Limited (each and/or collectively, the “Company”). It is based on information obtained from sources believed to be reliable, but the Company does not make any representation or warranty, express or implied, as to its accuracy, completeness, timeliness or correctness for any particular purpose. Opinions expressed are subject to change without notice. This research is prepared for general circulation. Any recommendation contained herein does not have regard to the specific investment objectives, financial situation and the particular needs of any specific addressee. The information herein is published for the information of addressees only and is not to be taken in substitution for the exercise of judgement by addressees, who should obtain separate legal or financial advice. The Company, or any of its related companies or any individuals connected with the group accepts no liability for any direct, special, indirect, consequential, incidental damages or any other loss or damages of any kind arising from any use of the information herein (including any error, omission or misstatement herein, negligent or otherwise) or further communication thereof, even if the Company or any other person has been advised of the possibility thereof. The information herein is not to be construed as an offer or a solicitation of an offer to buy or sell any securities, futures, options or other financial instruments or to provide any investment advice or services. The Company and its associates, their directors, officers and/or employees may have positions or other interests in, and may effect transactions in securities mentioned herein and may also perform or seek to perform broking, investment banking and other banking or financial services for these companies. The information herein is not directed to, or intended for distribution to or use by, any person or entity that is a citizen or resident of or located in any locality, state, country, or other jurisdiction (including but not limited to citizens or residents of the United States of America) where such distribution, publication, availability or use would be contrary to law or regulation. The information is not an offer to sell or the solicitation of an offer to buy any security in any jurisdiction (including but not limited to the United States of America) where such an offer or solicitation would be contrary to law or regulation.
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