Free Trial

NBH Continues Its Fight Against Inflation (Public Enemy)

HUNGARY
  • EURHUF down significantly following the NBH surprising response today, proceeding with a 185bps hike.
  • EURHUF hit a low of 396.60 before edging higher.
  • Expectations for June 30 should rise with NBH readjusting its 1W depo rate higher by at least 50bps.
  • Today's hawkish response was mostly done to limit the HUF weakness, which has been trading at all-time lows against EUR, USD and therefore keeps supporting inflation expectations.
  • It could be possible that policymakers were aiming for a one-off aggressive hike to ease selling pressure on HUF, then come back to monthly rate decisions after readjusting the 1W depo rate by 50bps to 7.75% on Thursday (which will be equal to the base rate).
  • Today's action confirms Hungary officials desire to continue their fight against inflation, referred several times as the 'public enemy'.
  • Deputy Governor Virag will hold a press conference at 3pm CET.

To read the full story

Close

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.