Reuters Poll: Analysts see MNB keeping base rate on hold

EU

Analysts polled by Reuters expect the National Bank of Hungaryʼs (MNB) policy makers to keep the central bankʼs base rate on hold at 0.9% during their meeting on Tuesday, Hungarian news agency MTI reported yesterday.

All 22 analysts projected that MNB would keep its base rate unchanged in a poll conducted Wednesday and Thursday, Reuters said.

After cutting its base rate to a record low last month, the Hungarian central bank, said it would keep rates on hold as long as possible.

Some analysts still expect further rate easing later this year or next, but the median forecasts in the poll suggested no change until the end of 2017.

“Eurozone interest rates could stay flat or even drop further until 2018, while the Fed could slowly lift rates, and as a result of the two, Hungary could keep its own rates on hold,” said Eszter Gargyán, a Citi analyst in Budapest.

Several analysts noted that their forecasts were based on the assumption that Britain would stay in the EU. 

“The impact on Hungary will depend on a multitude of factors ... for example, the European Central Bank may even add further easing measures to compensate the negative impacts on growth,” said Ákos Kuti of MKB bank concerning a possible Brexit.

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