FACTBOX-Inflation and monetary policy in Southeast Asia

Oct 3 (Reuters) - As inflation has been under control, central banks across Southeast Asia are likely to continue supporting economic growth in the face of increased global risks from the euro debt crisis and signs of slowing in the United States and China.

Below is a snapshot of Southeast Asian inflation and policy trends.


Asia inflation graphic : Asia inflation stories Asian central banks



Annual headline inflation rose more than expected to 3.38 percent in September from August's 2.69 percent, data on Oct. 1 showed, but the central bank is still expected to leave policy on hold as economic risks remain high. ID:nL4E8KK2Z2]

The Bank of Thailand (BOT) left its benchmark interest rate unchanged at 3.0 percent on Sept. 5, betting on domestic demand after making cuts in November and January to help the economy recover from severe flooding in late 2011.


The BOT has said it is ready to adjust the rate if needed. Most economists expect no change for the rest of 2012, although a few think a cut is possible following recent weak economic data. It next reviews monetary policy on Oct. 17.

The BOT has forecast headline inflation of 2.9 percent and core inflation of 2.2 percent for 2012, which is inside its target range of 0.5-3.0 percent, which guides monetary policy.

* Key pages: * Next CPI data: Nov. 1 INDONESIA

Indonesia's inflation in September eased to 4.31 percent from a year earlier, lower than expected and versus 4.58 percent in August, data showed on Oct. 1.

The relatively mild inflation figures, coupled with the gloomy outlook for the global economy, mean Bank Indonesia is expected to keep its benchmark rate at a record low 5.75 percent for the rest of the year, economists say.

The central bank kept its policy rate at a record low 5.75 percent for a seventh month on Sept. 13, as expected, as it seeks to take advantage of low inflation to drive credit growth in Southeast Asia's top economy.


It last changed the benchmark rate in February, when there was a trim of 25 basis points to follow 75 bps of cuts in October and November.

* Key pages:

* Next CPI data: tentatively Nov. 1


The economy does not need more stimulus for now as domestic demand remained buoyant despite the global slowdown dampening exports, but the central bank can ease policy if needed later this year, Governor Amando Tetangco told Reuters on Sept. 26.

The Bangko Sentral ng Pilipinas has kept its overnight borrowing rate at a record low of 3.75 percent following three cuts totaling 75 basis points this year aimed at shielding the economy against external shocks. It next meets on Oct. 25.

Tetangco said higher oil and food prices in the world market were upside risks to inflation, but these risks were moderated by the weak global economic outlook.

Annual inflation picked up more than expected to 3.8 percent in August, the highest since January due to higher commodity costs, data on Sept. 5 showed.

* Key pages: * Next CPI data: Oct. 5 VIETNAM

The inflation rate accelerated to 6.48 percent in September from 5.04 percent in August, but was far lower than the double-digit rates of last year, data on Sept. 24 showed.


The country's economic growth could reach 5.5 percent in 2012, and it would be able to keep its annual inflation at 6 percent, Prime Minister Nguyen Tan Dung told the official Vietnam News Agency early in September.

The central bank said on June 29 that it would cut key policy rates for the fifth time this year in a bid to stimulate the economy after the country reported first-half growth that was significantly lower than a year earlier.

That will bring the refinance rate to 10 percent from 11 percent and the discount rate to 8 percent from 9 percent, effectively July 1.

* Next CPI data: around Oct 23-26.


Annual headline inflation eased to 3.9 percent in August from July's 4.0 percent, data on Sept. 24 showed, paving the way for the central bank to ease monetary policy by slowing the appreciation of the Singapore dollar.

The Monetary Authority of Singapore (MAS) is scheduled to release its half-yearly monetary policy statement in October. It is widely expected to loosen policy by slowing the pace of Singapore dollar appreciation amid concerns the city-state could slip into recession.

At its last policy statement in April, MAS said it will let the local unit rise at a slightly faster pace as a cushion against inflation.

Singapore manages policy by letting its dollar rise or fall against a secret basket made up of the currencies of its main trading partners to control imported inflation.

* Key pages: * Next CPI data: Oct. 23. MALAYSIA

Annual inflation was 1.4 percent in August, unchanged from July's and in line with expectations, data on Sept. 19 showed, and economists said the central bank will likely keep the benchmark rate steady through the year.

The central bank said it expected price pressures to remain moderate for the remainder of 2012 and into 2013.

Bank Negara Malaysia left its policy rate unchanged at 3.0 percent for the eighth meeting in a row on Sept. 6, saying domestic demand was helping shore up the economy amid a weakening external sector.

It has kept its monetary policy unchanged since last May, when it hiked the benchmark rate for the fourth time after starting a tightening cycle in 2010.

* Key pages: * Next CPI data: Oct. 17.

(Compiled by Orathai Sriring in Bangkok; Editing by Alan Raybould)

((orathai.sriring@thomsonreuters.com)(+662 6489729)(Reuters Messaging: orathai.sriring.reuters@reuters.net))