Budapest (MTI) – Analysts expect the National Bank of Hungary’s Monetary Council to reduce the central bank’s key rate by 20 basis points to 1.90 percent at a policy meeting on Tuesday.
ING chief analyst Andras Balatoni said low inflationary pressure would probably prompt the 20 basis point cut, which could be followed by further easing over three months, bringing the base rate to 1.50 percent by July.
K and H senior analyst David Nemeth said fresh data on GDP, retail sales, wages and employment were all favourable, and inflation was still under the mid-term target. The forint is also at its strongest level since 2014, he added.
Nemeth projected a 20 basis point cut on Tuesday to be followed by a further, cautious easing.
At the last policy meeting, on February 24, the Monetary Council acknowledged risks pointing in the direction of a lower base rate had increased, but agreed to decide on any possible rate change only after reviewing the central bank’s next Inflation Report.
The Council is scheduled to discuss the final version of the NBH’s fresh Inflation Report at the policy meeting on March 24.
After a rate-setting meeting last July, the Council said it had wound up an easing cycle started almost two years earlier.
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