Analysts expect continued monetary easing today

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Hungarian analysts expect the National Bank of Hungary to continue an easing cycle at a steady pace at a policy meeting today. K&H chief analyst Dávid Németh said the central bankʼs Monetary Council would probably reduce the base rate by 15 bp to 1.50% at the meeting today. 

The cut is likely to be the last of the cycle on the chance inflation rises faster than expected and reaches the MNBʼs mid-term "price stability" target by the end of the year, he added. ING Bank senior analyst András Balatoni also said rate-setters would probably decide on a 15 bp cut, but added that the central bankʼs short-term outlook, would determine its next step.

At a policy meeting in May, the Monetary Council maintained their guidance for continued "cautious easing". According to the minutes of the meeting: "The overwhelming majority of decision-makers judged it necessary to maintain the previous forward guidance and agreed that cautious easing of monetary conditions might continue as long as it supports the achievement of the medium-term inflation target."

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