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Analysts expect base rate to stay unchanged at 8.5%

Analysts in the latest Reuters poll forecast the Hungarian Central Bank’s (MNB) base rate will remain unchanged at 8.5% throughout the rest of the year and expects a 100 basis-point (bp) cut in the rate by the end of 2009.

Thirteen out of 16 analysts in the poll predicted that the monetary council will keep the current rate on hold at its rate-setting meeting on Monday, while two of the analysts expect a 50bp increase of the rate to 9.0%.

Analysts in the poll expect CPI to decelerate further to 5.2%-5.3% in October and to below 4.9% by the end of the year from 5.7% in September.

After the recent fall of the forint, analysts projected a sharply weaker forint/euro rate for both the end of this year and next year than they did in the September poll. The median forint/euro forecast for the end of 2008 was 256.50 and the median for the end of 2009 was 250.0 compared to the September projection of 240.00 for the end of both years.

The forint traded at above 268 to the euro Friday early afternoon in volatile exchange. (MTI – Econews)