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:
- Hungary’s decision to hold the base rate at 13% and cut the effective rate 100bps to 16% was in-line with sell-side consensus.
- The upper rate of the Bank’s interest rate corridor was also cut a further 100bps – from 19.5% to 18.5%.
- Deputy Governor Virag said that the one-day deposit rate will likely be converged to the 13% base rate around the September meeting. Though this is the base case for most sell-side analysts, it is the first time an NBH official has offered such guidance and affirmed market pricing.
See the full MNI review with a summary of sell-side views here:
In its accompanying policy statement, the NBH said “maintaining the current level of the base rate will ensure that inflation expectations are anchored and the inflation target is achieved in a sustainable manner”, a slight shift in language from the May edition which said “it is necessary to maintain the current level of the base rate over a prolonged period, which will ensure that inflation expectations are anchored and the inflation target is achieved in a sustainable manner.”
In his post-decision presser, Deputy Governor Virag said that the one-day deposit rate will likely be converged to the 13% base rate around the September meeting. Though this is the base case for most sell-side analysts, it is the first time an NBH official has offered such guidance and affirmed market pricing. Nevertheless, Virag’s speech otherwise struck familiar tones by reiterating that future decisions will be made based on all available data and in a cautious and gradual manner.
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.