Hungarian Forint: New inflation target demands hawkish MNB – Commerzbank
Commerzbank’s Tatha Ghose notes the National Bank of Hungary paused cuts at 5.50% but lowered its medium‑term inflation target to 2.5% while simultaneously lifting 2027 inflation forecasts.
Hungarian Forint inflation target demands more cautious stance from National Bank, argues Commerzbank analyst Tatha Ghose. The MNB paused rate cuts, leaving the base rate at 5.50%, but lowered its medium-term inflation target to 2.5% effective from January 2028. However, they also raised their 2027 inflation forecast from 2.3% to 3.1%, reflecting global energy price increases and tobacco tax hikes.
This combination of a lower target and higher forecast implies a more restrictive monetary policy stance. Yet, the MNB continues to discuss holding or cutting rates, which is concerning for Ghose. The forint remains weak due to deteriorating geopolitical risks, and it won't recover until the MNB adopts a more hawkish approach.
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