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MNI NBH Review - May 2024: Maintaining Cautious Approach

The National Bank of Hungary cut its base rate by 50bps to 7.25%, in a unanimous decision.

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Executive Summary

  • The National Bank of Hungary cut its base rate by 50bps to 7.25%, in a unanimous decision. This marked a continuation from the 50bp cutting pace in April and the decision was in line with analyst estimates, which had been well priced by markets.
  • The NBH reiterated that decisions on any further reductions in the base rate will be taken in a “cautious and data-driven manner”. Emphasising this, the board stated that “risks surrounding global and domestic disinflation and volatility in international investor sentiment warrant a careful and patient approach to monetary policy.”
  • Deputy Governor Virag detailed that he sees the key rate in a range between 6.75%-7.00% after the June decision, suggesting that options of both 25 and 50bp cuts next month are on the table. He concluded the post statement briefing by explaining that room for rate cuts after June is “very, very limited”.

Click to view the full review:

NBH Review May 24.pdf

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Executive Summary

  • The National Bank of Hungary cut its base rate by 50bps to 7.25%, in a unanimous decision. This marked a continuation from the 50bp cutting pace in April and the decision was in line with analyst estimates, which had been well priced by markets.
  • The NBH reiterated that decisions on any further reductions in the base rate will be taken in a “cautious and data-driven manner”. Emphasising this, the board stated that “risks surrounding global and domestic disinflation and volatility in international investor sentiment warrant a careful and patient approach to monetary policy.”
  • Deputy Governor Virag detailed that he sees the key rate in a range between 6.75%-7.00% after the June decision, suggesting that options of both 25 and 50bp cuts next month are on the table. He concluded the post statement briefing by explaining that room for rate cuts after June is “very, very limited”.

Click to view the full review:

NBH Review May 24.pdf