London analysts: Unconventional tools ‘not enough to stabilize HUF’ at competitive levels

Deals

Unconventional monetary policy on its own will probably not be powerful enough to stabilize the forintʼs exchange rate at a competitive level, and the central bank is likely to have to resume its rate cutting cycle soon, London-based emerging markets economists said yesterday, according to Hungarian news agency MTI.

In its daily Global Macro update, released to clients in London, Barclays said it now forecasts an additional interest rate cut of 25 bps in the second quarter from the current 1.35%.

The forint has appreciated significantly against the euro since the beginning of the year. This probably reflects the fact that the MNB left monetary policy unchanged in response to the ECBʼs easing in December. If sustained, this could hurt growth and make it difficult to reach the inflation target in the medium term, Barclays said.

“We anticipate that the ECB will ease policy further and this is likely to put additional (appreciation) pressure on the HUF against the euro, in line with the most recent experience”, it added.

ADVERTISEMENT

Áder Flags Delay in Full-scale Rollout of Bottle Return Syst... Recycling

Áder Flags Delay in Full-scale Rollout of Bottle Return Syst...

India's G20 Presidency, Dawn of New Multilateralism - Narend... World

India's G20 Presidency, Dawn of New Multilateralism - Narend...

AutoWallis Exceeds Entire 2022 Revenue, Profit in 9 Months Automotive

AutoWallis Exceeds Entire 2022 Revenue, Profit in 9 Months

TikTok Commits to Improved Consumer Communication in Hungary Social

TikTok Commits to Improved Consumer Communication in Hungary

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.