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SocGen on HUF and NBH

HUNGARY
  • SocGen expects HUF market to remain roughly stable for now, with the MNB likely to keep the 1w depo rate at 9.75% on Thursday.
  • Nonetheless, SocGen thinks the HUF will weaken gradually over the coming months as the wide current account deficit, the energy crunch in the region and in Germany, and difficult relations with the EU (SocGen does not expect the RRF money to be released for Hungary anytime soon) continue to weigh on the forint.
  • SocGen updated base case is for another 100bp increase in the 1w depo and the base rates in July, with 100bp more in August, and 125bp in September and October.
  • The MNB rates would thus hit 13% by October.

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