APAC Economic Comment: ASEAN Weekly: Central bank round-up, Malaysia diesel subsidy, Singapore CPI and IP, Indonesia fiscal

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APAC Economic Comment: ASEAN Weekly: Central bank round-up, Malaysia diesel subsidy, Singapore CPI and IP, Indonesia fiscal

Global Research

26 June 2026ab

APAC Economic Comment Economics

AsiaASEAN Weekly: Central bank round-up,

Malaysia diesel subsidy, Singapore CPI and IP, Claire Long

Economist

claire.long@ubs.comIndonesia fiscal

+65 6495 7426

Grace Lim

Ceasefire holds, oil is lower, hikes are slower grace-k.lim@ubs.com

The Bank of Thailand held its policy rate at 1.00% on 24 June, as widely expected. While +65-6495 5965

2026 growth forecasts were revised up, inflation projections were lowered, reflecting

softer oil price assumptions. In light of this, we have adjusted our rate outlook: we now

expect the BoT to remain on hold over the next two meetings, before delivering a hike in

December as it begins to normalize its still-accommodative policy stance (see note). Last

week, BI and BSP both raised rates by 25bp in line with expectations. However, post-

decision guidance was more balanced than overtly hawkish. BI emphasized that its move

was primarily aimed at supporting FX stability, rather than a response to domestic

growth-inflation dynamics. Meanwhile, BSP signaled a preference for gradual “baby

steps”, with weak growth also factoring into its policy considerations. Overall, the

messaging from ASEAN central banks suggests that the tightening cycle is nearing

completion. We expect one additional rate hike from BSP in August and from BI in

September, contingent on continued easing in inflation risks driven by lower oil prices

(see note).

Malaysia: Diesel prices cut, BNM's commentary on the ringgit

Malaysia will lower targeted subsidised diesel to RM2.10/litre from July 2026 and unify

subsidy delivery nationwide via a MyKad-based system (BUDI Diesel), extending the