Global Policy Rates: Changes to rates and HSBC forecasts

Research evidence excerpt

Global Policy Rates: Changes to rates and HSBC forecasts

Economics ● Global

25 June 2026

◆ In India, the Reserve Bank of India announced multiple measures to support the INR and raised its inflation forecast but kept the policy rate unchanged. Despite some relief in oil prices

from the de-escalation of the Middle East tensions, we expect two 25bp rate hikes in Q4 2026, as El Niño related disruptions would still keep inflation elevated.

◆ Bank Indonesia raised its policy rate by 25bp to 5.75% at its June policy meeting, marking a total of 100bp in rate increase in one month, to defend the INR and pre-empt inflation risks.

We expect another 25bp hike in Q3 2026, taking the policy rate to 6.00%, to support the IDR.

◆ In the Philippines, the central bank delivered a 25bp rate hike at its June meeting, as inflation concerns remain. We expect further rate hikes, which would take the policy rate to 5.50%

by end-2026. In 2027, the central bank would likely start easing again in H2 2027, cutting its policy rate to 5.00% by end-2027.

◆ The State Bank of Vietnam (SBV) has kept its policy rate steady at 4.50%. but is increasingly finding it challenging to balance growth and inflation. With inflation rising, and depreciation

of the Vietnamese dong, we now expect the SVB to hike by a total of 50bp in Q3 and Q4 2026, bringing the policy rate to 5.50%.

◆ The Central Bank of Sri Lanka already pre-emptively hiked the policy rate by 100bp at the May meeting, as inflation remains above CBSL’s target and further upside risks remain. We

expect the central bank to keep the policy rate unchanged in 2026, followed by a 50bp cut in Q2 27 once inflation eases closer to CBSL’s 5% target.

◆ In Poland, the upside surprise to the latest inflation print was mainly related to higher energy prices.