Equilor expects easing cycle to end
The further base rate cut by the Monetary Policy Council of the National Bank of Hungary (MNB), which eased an additional 15 bp to 1.35%, counters earlier expectations of analysts, Equilor said in a press release today. Equilor expects this cut to put an end to the easing cycle started in March.
According to Equilor, this morningʼs announcement that MNB governor György Matolcsy will be holding a press conference today from 2:30 PM, signals that this could be the last cut of the easing cycle.
The end of the cycle can be justified by the recently growing inflation indices and discount as compared to the Polish base rate of 1.50%, Equilor said in the press release. The press release added that yesterday investors were calculating with a base rate of around 1.30% at the lowest.
As Equilor anticipates that this will be the end of the easing cycle, they do not expect the Hungarian forint to weaken, and see the exchange rate of EUR/HUF remaining around 305-315.
"In the Council’s assessment, the policy rate has reached the level which ensures the medium-term achievement of the inflation target and a corresponding degree of support to the economy," the rate-setters said in a statement after the meeting, thereby signaling an end to the easing cycle.
According to Hungarian news agency MTI, the Council said inflationary pressures are "likely to remain moderate" as the output gap closes "only gradually". It also noted that a "cautious approach" to monetary policy was warranted because of "uncertainty in the global financial environment".
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.