MNB likely to continue easing cycle on Tues

Analysis

The National Bank of Hungary's Monetary Council is likely to reduce the central bank's base rate by another 25bp to 4.75% at a meeting on Tuesday, according to a poll of analysts by Reuters. Reuters said 18 of 20 analysts expect rate-setters to continue an easing cycle started last August and cut the base rate by a quarter of a percentage point. Council members said after their previous rate-setting meeting late in March they could consider a further reduction in rates if inflationary pressure remains moderate and financial market uncertainty wanes. "In terms of future monetary policy decisions, members agreed that the Council would only consider a further reduction in the policy rate if medium-term inflationary pressures remained moderate and the uncertainty surrounding financial market developments diminished," according to the minutes of the meeting. Reuters said the analysts see the easing cycle continuing until the base rate reaches 4.00%. A month earlier, they put the end of the cycle at 4.50%.

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