The forint is likely to trade well above the 290 mark against the euro until plans of György Matolcsy, the new central bank governor, become clearer for market participants, London-based emerging markets analysts said on Monday. Commerzbank said that Matolcsy’s actions at the next central bank meetings will be decisive for the medium term outlook of the forint. A rate cut cycle to 4.50-5.00% is broad market consensus. However, what is creating more pressure is the expectation of measures of quantitative easing “a la Fed”, as well as unconventional measures to weaken the forint, Commerzbank’s analysts added. JP Morgan’s London-based analysts said Matolcsy’s remarks at his parliamentary hearing on policy tools available to support growth suggests to them that the MNB will now follow more of a dual mandate than under the previous governor, András Simor, who placed a greater emphasis on the MNB’s primary objective of price stability.
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