MNB base rate could climb above 10%, City analysts say

MNB

According to the significantly revised forecasts of London-based emerging markets analysts, the base rate of the National Bank of Hungary (MNB) could climb above 10% this year as The Monetary Council of MNB decided to raise the base rate by 185 bp to 7.75% at a monthly policy meeting on Tuesday, according to a report by state news wire MTI.

Analysts at Morgan Stanley revised their expectation for the base rate at the end of Q3 upwards to 10% from their earlier 8.9% estimate.

The analysts do not rule out MNB ending its tightening cycle in September if inflation stabilizes, but they still think it is highly probable that there will be a 25 bp base rate hike in October, meaning the base rate could peak at 10.25% in Q4.

Analysts at Capital Economics said the Hungarian central bank could continue to tighten its monetary policy aggressively and could raise the base rate to 10.5% by the end of the year. Previously Capital Economics expected the base rate to peak at 8.2% in 2022.

 

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