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NBH Expected To Hike Its ‘Core’ Policy Rate By 30bps

HUNGARY
  • The NBH is expected to continue its gradual tightening policy on January 25 by raising its 'core' policy rate by 30bps to 2.7%.
  • The ‘core’ policy rate is forecasted to gradually converge towards the 1W depo rate through H1 2022.
  • The 1W depo rate is also expected to be increased by 30bps to 4.3% on Thursday (Jan 27) and is likely to be raised to (or above) 4.5% in the ST to ease inflationary pressures and limit the downside risk on HUF.
  • We saw that the selling pressure on HUF remained elevated last week as NBH decided to mark a pause in its tightening cycle, leaving its effective policy rate unchanged at 4% (1W depo) since the start of the year.

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