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NBH Say Liquidity Measures to Remain in Place Until Improvement in Risk Sentiment

  • The NBH left the base rate unchanged at +13.0% in yesterday’s rate decision. However, this rate has little relevance with alternative liquidity measures continuing to anchor short-term market rates.
  • Forward guidance was also little changed with the NBH adding that the new measures will remain in place until there is a marked improvement in risk sentiment. The bank also detailed their plans for the two-month deposit facility, with which they plan to roll over the excess liquidity (estimated at ~ HUF 2.5trl) parked at the deposit facility at the end of November.
  • Prime Minister Orban has sparked a diplomatic row with a number of surrounding countries after wearing a scarf to a football match depicting a map of the now defunct 'greater Hungary' containing territories now part of Ukraine, Romania, Slovakia, Croatia. Romania voiced "firm disapproval" of Orban's gesture while Ukraine demanded an official apology. The fallout from this action is unlikely to improve relations when the EU is banking on unanimous support for a EUR18bln aid package for Ukraine. Orban is currently blocking the package.
  • There are no major data releases scheduled today following yesterday’s rate decision. Average gross wages and unemployment data are left on the docket later this week.

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