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Analysts expect MNB to cut base rate further

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Reuters-polled analysts anticipate the National Bank of Hungary’s (MNB) rate-setting Monetary Council will cut the current 1.95% base rate by a further 10-15 bp at the upcoming policy meeting on Tuesday.

The majority of polled analyst – 20 out of 21 – expect the base rate to be cut by 15 bp, and only one of the analysts queried foresaw a base rate cut of 10 bp.

"We currently look for back-to-back 15 basis-point rate cuts through May," Bank of America Merrill Lynch analysts said in a note, adding that for the rest of the year, the central bank could adopt a more cautious easing pace.

MNB deputy governor Ádám Balog told Reuters earlier that the central bank’s recently relaunched easing cycle would "definitely" consist of several steps, though not necessarily 15 bp ones.

The Reuters-polled analysts expect Hungaryʼs base rate to be lowered to 1.5% in the fourth quarter of 2015 before rebounding to 2.25% by the end of next year.

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