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HUF: Forint Unfazed By Varga's Nomination To Central Bank Governor Position

HUF
CEEMEAEM BulletBulletEmerging Market NewsHungary

There has been little reaction in EUR/HUF to the news that Prime Minister Orban proposed Mihaly Varga as the new central bank head, with the rate last changing hands at 412.51.

  • Matolcsy has often been at odds with government officials over the NBH’s hawkish policy mix, and so Varga’s appointment – while expected – may raise the prospects of rapid rate cuts next year even if the inflation outlook does not warrant so given that the new management team will be given a mandate directly from the Prime Minister.
  • Economy Minister Marton Nagy said in an interview earlier this week, “We think that hopefully we can move lower from 6.5%,” adding that the current real interest rate over 3% is “not justifiable.”
  • Still, the general view among analysts is that Varga is ultimately unlikely to stray too far, too quickly from the current regime’s tight stance given the weak position of HUF.
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There has been little reaction in EUR/HUF to the news that Prime Minister Orban proposed Mihaly Varga as the new central bank head, with the rate last changing hands at 412.51.

  • Matolcsy has often been at odds with government officials over the NBH’s hawkish policy mix, and so Varga’s appointment – while expected – may raise the prospects of rapid rate cuts next year even if the inflation outlook does not warrant so given that the new management team will be given a mandate directly from the Prime Minister.
  • Economy Minister Marton Nagy said in an interview earlier this week, “We think that hopefully we can move lower from 6.5%,” adding that the current real interest rate over 3% is “not justifiable.”
  • Still, the general view among analysts is that Varga is ultimately unlikely to stray too far, too quickly from the current regime’s tight stance given the weak position of HUF.