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NBH Keeps 1W Depo Rate Steady at 10.75% Despite HUF Weakness

HUNGARY
  • Yesterday, the NBH decided to keep its 1w depo rate steady at 10.75% (as expected) despite renewed HUF weakness.
  • We argued that 410 seems to be the new threshold for NBH policymakers to start considering intervening via the 1W depo facility.
  • However, persistent forint depreciation could eventually pressure NBH to act as it keeps de-anchoring inflation expectations.
  • EURHUF has been trending higher this week, gradually approaching its ST key resistance at 410.
  • A break above that level would open the door for a move up to 416.90, the pair’s all-time high.

Source: Bloomberg

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