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:
- The NBH surprised the market with a 50bps on January 25 (vs. 30bps expected)
- The central bank will continue to tighten until inflationary pressures ease
- 1W depo rate expected to be raised by 30bps on Thursday, with 'core' policy rate gradually converging towards the 1W depo rate through H1 2022
Link to full preview:
The NBH decided to surprise market with a 50bps hike at yesterday’s meeting, levitating the 'core' policy rate to 2.9% (consensus was expecting a 30bps hike). The NBH also raised the ceiling on its interest-rate corridor to 4.9% from 4.4%, to leave some room for further tightening via the weekly deposit rate. Majority of sell-side analysts also expect a 30bps hike in the 1W depo rate ('effective' policy rate) on Thursday (Jan 27). However, the renewed weakness in HUF due to global risk-off environment puts NBH policymakers in a difficult position; a weakening forint keeps supporting inflation expectations. Hence, further HUF depreciation in the ST could 'push' policymakers to hike more than expected on Thursday.
Source: Bloomberg/MNI
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.