Analysts foresee further base cut of 15 bp

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The Monetary Council of the National Bank of Hungary is expected to continue the easing cycle it began on March 24 and to cut the current base rate of 1.65% by 15 basis points, according to analysts polled by Reuters this week.

Reuters surveyed the analysts between June 12-17, and all 20 forecast the lowering of the base rate by 15 basis points. Most expected the cuts to stop at this point, but some said it may go as low as 1.2-1.3% by the end of the year.

The median forecast by survey participants was a 1.5% base rate at the end of the year and a 2% base rate at the end of 2016, Reuters said.

"I think they will raise the forecast to 3% for the end of next year and based on this, they could signal a halt," said János Samu of Concorde. "But if they want to weaken the forint, they will not say anything and keep cutting," he added.

"The Greek situation and the looming Fed interest rate hike have a limited impact on the forint and the central bank would probably be comfortable with a weaker forint," said Eszter Gárgyán, an economist at Citigroup.

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