Interest rates in Hungary not expected to change until Q4 2016

Analysis

Hungary is likely to keep interest rates on hold "as long as possible," Citigroup said in a note on Wednesday. It forecasts that Hungary will keep rates unchanged until at least the fourth quarter of next year, and raise them "only very gradually" thereafter.

A hawkish shift in Fed policy outlook and/or a deterioration in Hungaryʼs strong current account surplus could force Hungary to raise rates earlier, Citi said.

Given that mortgages, following their conversion earlier this year from foreign currencies into the local currency, are benchmarked to the three-month Budapest Interbank Offered Rate, or Bubor, central bank rate increases may become a politically sensitive issue ahead of Hungaryʼs next parliamentary elections, due in spring 2018, Citi said.

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.

Support the BBJ

Statistics