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23 Jun 2015
No more rate cuts in Hungary? – TDS
FXStreet (Edinburgh) - Strategist Paul Fage at TD Securities assessed today’s decision of the NBH of lowering its benchmark rate by 15 bp to 1.50%.
Key Quotes
“At today’s MPC meeting, the National Bank of Hungary (NBH) cuts its policy rate, the base rate, by 15 bps to 1.50%. This was in line with our and the almost unanimous consensus expectation”.
“We were expecting some change in the language in the press statement suggesting that the NBH is nearing the end of the easing cycle and we got it”.
“We think that the NBH will end the easing cycle by cutting its policy rate by 15 to 20 bps more bringing it to a low point of 1.35% or 1.30%. This final easing could be done in one cut at the July meeting, or spread over two months”.
“The NBH revised its growth and CPI forecasts for this year and next. In particular, it does not see the CPI inflation rate reaching the 3% target until the start of 2017 (prior forecast was end of 2016)”.
“We think the fact that the end of the easing cycle is in sight is positive for HUF and we would see EURHUF moving down to 305. The risk to this forecast is a Greek default and/or GREXIT”.
Key Quotes
“At today’s MPC meeting, the National Bank of Hungary (NBH) cuts its policy rate, the base rate, by 15 bps to 1.50%. This was in line with our and the almost unanimous consensus expectation”.
“We were expecting some change in the language in the press statement suggesting that the NBH is nearing the end of the easing cycle and we got it”.
“We think that the NBH will end the easing cycle by cutting its policy rate by 15 to 20 bps more bringing it to a low point of 1.35% or 1.30%. This final easing could be done in one cut at the July meeting, or spread over two months”.
“The NBH revised its growth and CPI forecasts for this year and next. In particular, it does not see the CPI inflation rate reaching the 3% target until the start of 2017 (prior forecast was end of 2016)”.
“We think the fact that the end of the easing cycle is in sight is positive for HUF and we would see EURHUF moving down to 305. The risk to this forecast is a Greek default and/or GREXIT”.