Hungarian Forint: MNB caution offers modest HUF support - Commerzbank
Commerzbank’s Tatha Ghose reports that Hungary’s central bank, Magyar Nemzeti Bank (MNB), cut its base rate to 5.50% but avoided pre-committing to further easing, stressing that September’s Inflation Report will guide policy. The bank will monitor global rate hikes, could limit the scope.
Hungary's central bank, Magyar Nemzeti Bank (MNB), reduced its base rate to 5.50% yesterday, matching expectations. However, MNB refrained from committing to further easing and indicated that the September Inflation Report would guide future policy decisions. MNB Governor Mihály Varga emphasized that the bank would monitor potential rate hikes by major central banks, suggesting the global market backdrop would act as a limit on Hungarian rate cuts.
The foreign exchange market reacted positively to MNB's communication, though the Forint's rally against the Polish Zloty remained modest. Overall, MNB's guidance was deemed to provide modest support for the Hungarian Forint.
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