The base rate set by the Central Bank will remain unchanged on Monday, opined both analysts and Forex traders. Reuter’s latest survey shows that the base rate is expected to decrease to 7% by the end of the year (presently at 7.75%).
For the coming Monday, 12 analysts opted for no change, and 5 expected a 25 bp decrease. The same tendency appeared in forex traders’ forecasts: 11 opted for no change, while 5 expected a 25 bp decrease. The weak forint will be one of the most important aspects of the decision, warned András Simor, president of the national bank. Inflation is expected to drop to 5.55% by the end of 2007, and 3.5% by the end of 2008. (Annual inflation expected for August is 8.1%.) The forint/euro rate is projected at 254 by September, and 251.5 by the end of 2007. Forecasted economic growth for 2007 has been adjusted to 2.4% after a drop of 1.4% in Q2. (Gazdasági Rádió, Magyar Hírlap)