Weakening forint could prompt rate rise on Tuesday - analysts

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The National Bank of Hungary's Monetary Council could raise rates at a meeting on Tuesday to prop up the weakening forint, City analysts told MTI's London correspondent on Monday.

Neil Shearing, an emerging market economist at Capital Economics, said the threat to financial stability posed by the softening forint was a bigger source for concern than inflation.

With the forint at a 14-month low against the euro, rate-setters are likely to tighten, not loosen, if they take a policy decision in the next three months, he said, adding that he would not exclude a "defensive" 50bp rate rise already at a meeting of the Monetary Council on Tuesday.

The forint traded at 291.7 to the euro a little before 4pm on Monday.

The Monetary Council left the central bank base rate on hold at 6.00% for the seventh month in a row at a meeting in August.

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