Hungary’s national bank expected to cut quick deposit rate today, forint may start to fall – UPDATED
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Today can mark an important milestone for the Hungarian forint and the country’s economy. The national bank may decide about relaxing its strict monetary policies. As a result, the 18 percent high quick deposit rate can be reduced by May. However, such decisions affect the exchange rate of the forint significantly.
According to Világgazdaság, Hungary’s Monetary Council will decide about the country’s new monetary policies today by 2 PM. However, this time there is more at stake: Barnabás Virág, the deputy head of the national bank, said in an interview that they might take a step towards normalisation.
Last October, the downfall of the forint and market turbulences demanded decisive intervention. As a result, they introduced unique interest rate levels in Europe, starting with the quick deposit, which is currently at 18 percent. Furthermore, they raised the interest rate corridor to 25 percent. Thanks to that, the exchange rate of the forint normalised and from a historic high of around 435/EUR, it returned to 370-370/EUR today.