Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
Executive Summary:
- Rates are expected to remain on hold at 13.0% as the NBH continues to use alternative liquidity measures as the main monetary tool moving forward.
- HUF volatility has remained heightened since the last NBH decision, with concerns over the smooth receipt of EU funding prompting markets to retain HUF’s close ties with broad risk sentiment.
- Analysts are uniform in seeing no change to headline policy rates this week, with most pointing toward the pre-announced tools as carrying the load for monetary policy going forward.
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The NBH are likely to keep the headline policy rate on hold again this month as the central bank continues to lean more heavily on liquidity tenders and FX swaps as tools to control liquidity, tighten financial conditions and continue to work against the market’s bias to sell HUF in periods of risk-off. Deputy Governor Virag highlighted that the central bank needs to see a significant improvement in risk sentiment to reduce the spread between the base rate (13%) and the effective rate (18%). Since there has been no marked improvement in either of these criteria, no change in the monetary policy setup is expected.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.