MNB may come under pressure to hike base rate - analysts

MNB

Factors supporting the forint are hard to come by and the current risk environment may pressure the central bank into a big rate hike, London-based financial analysts said on Tuesday.

In its Daily Currency Briefing report released to investors in London, Commerzbank said that with losses of 3.3% against the USD and 2.2% against the EUR, the previous trading day "made it into the top 15 of the black days for the forint since early 2007".

So far the peaks in EUR-HUF seen during the financial crisis in early 2009 have not been reached. Due to the rising concerns about Greece the uptrend is gathering momentum, though.

The next hurdle at 292.07 is already in view and after that "there is much scope up to the magic 300 mark".

The search for HUF-positive factors is "turning into the proverbial search for the needle in the haystack", even the projected ad hoc measures intended to take the pressure off the households holding foreign currency denominated loans will only provide a temporary solution and only take the pressure off some of the households.

The systemic risk of high foreign debt remains in place and constitutes an imminent risk for the Hungarian financial sector.

The higher EUR-HUF or CHF-HUF climb, the higher the likelihood that the Hungarian central bank "will land its big strike" and might raise key rates by 300bps in an effort to slow the depreciation of the forint, Commerzbank said.

ADVERTISEMENT

European e-commerce soars during pandemic - study Analysis

European e-commerce soars during pandemic - study

Lawmakers approve 2022 budget Parliament

Lawmakers approve 2022 budget

Duncan Graham reelected as BCCH president Appointments

Duncan Graham reelected as BCCH president

Budapest launches revamped coupon card for visitors City

Budapest launches revamped coupon card for visitors

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.