MNI NBH Preview - Dec'24: Rates, Guidance to Remain Unchanged
Executive summary:
- The National Bank of Hungary is expected keep its base rate unchanged at 6.50% during its final meeting of the year.
- A somewhat more stable backdrop for the HUF across December and no change in regime at the central bank until March means we are unlikely to see any material changes to the central bank’s hawkish communications either.
- This document will be re-released next week to include sell-side views.
See the full preview here:
Last month the NBH kept its base rate unchanged at 6.50%, a decision in-line with unanimous sell-side consensus. Communication in the policy statement and press conference remained hawkish, but no more so than the October statement, which noted again that a “careful and patient approach to monetary policy is still warranted”. Perhaps the most surprising part of the meeting came when Deputy Governor Virag revealed that one member of the Board voted for a cut, with minutes from the meeting later revealing that the lone dissenter was Deputy Governor Mihaly Patai.
Dovish signals could come in the form of the vote split again this month. Given that the path of inflation has been consistent with NBH forecasts since the last decision, Patai may be expected to dissent in the dovish direction again in December. Note that his break away from consensus along with Board Member Zoltan Kovacs in January marked the first dissenting view among the Council since 2016.