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NBH To Keep 1W Depo Rate Steady At 6.75% Despite HUF Weakness

HUNGARY
  • We have seen this week that the global risk off environment pushed the HUF to an all-time low against the Euro and the USD, with EURHUF breaking above the psychological 400 level in the past two days before edging lower this morning.
  • HUF remains the most ‘undervalued’ currency among the G10/CEE world, with the NEER HUF (broad index) trading nearly 25% below its LT average (see chart below).
  • Even though the sharp HUF depreciation keeps de-anchoring inflation expectations, sell-side analysts still expect the NBH to keep its 1W depo rate steady at 6.75% on Thursday (June 16) as hiking rate further will likely not support the forint in this environment.
  • The NBH will publish the minutes of its May meeting today (2pm CET).

Source: Bloomberg/MNI

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  • We have seen this week that the global risk off environment pushed the HUF to an all-time low against the Euro and the USD, with EURHUF breaking above the psychological 400 level in the past two days before edging lower this morning.
  • HUF remains the most ‘undervalued’ currency among the G10/CEE world, with the NEER HUF (broad index) trading nearly 25% below its LT average (see chart below).
  • Even though the sharp HUF depreciation keeps de-anchoring inflation expectations, sell-side analysts still expect the NBH to keep its 1W depo rate steady at 6.75% on Thursday (June 16) as hiking rate further will likely not support the forint in this environment.
  • The NBH will publish the minutes of its May meeting today (2pm CET).

Source: Bloomberg/MNI