William Jackson, a senior emerging markets economist at UK-based Capital Economics, said after the rate decision that there are “a whole host of reasons to think” that the easing cycle is nearing an end. The economy is recovering and core inflation is rising. What’s more, “it’s not clear that rates can be lowered much further without causing the forint to weaken, particularly in the context of the growing risk of a flare-up in tensions between the government and local banks.”
Economists at London-based financial consultancy 4cast opined after the Council’s rate decision that the post-meeting communique remained dovish, “although not more dovish than it had been a month earlier.”
Overall, the series of 20bp cuts a month is likely to continue: “We think that [the Monetary Policy Council] will get as low as 3.00% if there is no marked change on external markets … A persistent improvement in risk appetite and a further delay in the tapering expectations (related to the Federal Reserve’s quantitative easing cycle) may push the MPC towards cutting more,” 4cast analysts said.
Producing journalism that is worthy of the name is a costly business. For over 30 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.
