ADVERTISEMENT

Hungary central bank may opt for new rate cut next week, says City

Sights

Hungary's central bank may opt for a new rate cut next week after an unexpected 25bp easing in August, London-based emerging markets economists said in an Econews poll prior to the Monetary Policy Council's meeting next Tuesday.

Analysts at 4cast, a major London-based financial consultancy, said that once the external MPC members decided to assume the risk of "an unhappy 4:3 vote (in August), the ice has been broken, a precedent has been made". Thus, more rate cuts could come in further tight votes, despite the opposition of the three internal members and despite the fact that the upcoming CPI report in September may not unambiguously support the case for monetary easing. Accordingly, "we expect rates to be trimmed by another 25bp in September".

It seems the MPC may cut further in the coming months, even without a deal with the IMF, unless the external backdrop suddenly deteriorates, they said.

Obviously, "an unexpected agreement with the international lenders" could speed up the process of easing.

At the same time, the message of the tight vote and the discord within the MPC "will continue to stay on the back of the minds of many (investors), and in an adverse external backdrop it may serve as an argument to inflate any potential bearish momentum", 4cast's analysts said.

Emerging markets economists at Morgan Stanley said on Friday that "while very likely to be a close call (4-3), we expect another 25bp cut at Tuesday's meeting".

ADVERTISEMENT

Fiscal, monetary policy partnership needed to rein in CPI - ... Analysis

Fiscal, monetary policy partnership needed to rein in CPI - ...

Parliament approves amendment to Competition Act Parliament

Parliament approves amendment to Competition Act

New CEO announced at Codic Hungary Appointments

New CEO announced at Codic Hungary

FAO–Food Bank convoy delivers food to those in need City

FAO–Food Bank convoy delivers food to those in need

SUPPORT THE BUDAPEST BUSINESS JOURNAL

Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.