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NBH Sees 'More Extensive And Longer' Rate-Hike Cycle

HUNGARY
  • The NBH decided to hike its policy rate by 30bps to 2.1% (as expected), which disappointed the market and led to some HUF depreciation following the decision.
  • In its statement, the NBH confirmed that it will continue its monthly rate hikes as inflationary pressures are expected to remain elevated in the near term.
  • Deputy Governor Virag mentioned during the press conference that the NBH needs to quickly react to currency-market risk.
  • The weakness in the HUF keeps supporting inflation expectations, which could slow down the convergence back to the central bank's 3-percent target.
  • NBH may raise the key deposit rate above benchmark rate on Thursday.
Link to the statement:

https://www.mnb.hu/en/monetary-policy/the-monetary...

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