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MNI NBH Preview - March 2022: NBH To Accelerate Tightening Pace

Hungary Central Bank
Hungary Central Bank

Executive Summary:

  • The NBH is likely to accelerate the pace of its policy tightening following the recent adjustment on the 1W depo facility
  • The central bank will probably proceed with a 100bps hike on its ‘core’ policy rate at tomorrow’s meeting, which would levitate the benchmark rate to 4.4%
  • EURHUF still trades above the 370 key level and therefore further adjustment via the 1W depo rate facility may be needed to support the forint

Link to full preview:

NBH CB Prev - March 25.pdf

The National Bank of Hungary (NBH) is likely to accelerate the pace of its policy tightening following the recent adjustment on the 1W depo facility. The central bank will probably proceed with a 100bps hike on its ‘core’ policy rate at tomorrow’s meeting, which would levitate the benchmark rate to 4.4%. As a reminder, the NBH has increased the 1W depo rate by 125bps since the beginning of March to ease the selling pressure on HUF following the dramatic depreciation in CEE FX in the end of February/beginning of March.

Source: Bloomberg/MNI

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