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NBH Remains On Hold As Expected

HUNGARY
  • This morning, the NBH decided to keep it 1W depo rate unchanged at 4.3% (as expected) for the third consecutive week.
  • As a reminder, deputy Governor Barnabas Virag said during his latest press conference that the central bank plans to shift to monthly moves in the 1W depo rate, likely to hike by another 30bps in February and March.
  • However, the NBH could once again act via the 1-week facility if the HUF starts to weaken again in the current environment.
  • Next ‘core’ meeting will take place on February 22; the ‘core’ policy rate (currently at 2.9%) is likely to be raised by 50bps and is expected to converge towards the 1W depo rate through H1 2022.
  • Today, PM Orban will meet Brazilian President Jair Bolsonaro in Budapest.

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