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Goldman Sachs Says NBH Action Does Not Change Fundamental Picture

HUNGARY
  • The decision represents an effective interest rate tightening (3M BUBOR rate increased from 13.9% to 16.2%) and reveals the MNB's sensitivity to excessive Forint weakness.
  • While this has brought some relief for the currency, the fundamental picture is unlikely to change in the near term (barring a quicker resolution on the EU funds issues), and if the currency pressures persist it implies pressures on the MNB to deliver more policy tightening.

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