EUR/HUF: A large rate cut in Hungary should not have much negative impact on Forint – ING

EUR/HUF has hit its lowest levels since early September in recent days. Economists at ING analyze Forint’s outlook ahead of the National Bank of Hungary (NBH) meeting.

Positive on the HUF for today

We expect the central bank to start the second phase of interest rate normalisation with a 50 bps cut in the base rate.

In the event of a 50 bps cut, the market has some room to correct short-term expectations towards smaller cuts further out, which would be positive for HUF. On the other hand, if NBH surprises with a 75 bps rate cut, it should not have much negative impact on HUF given market expectations priced in here.

See – Hungary: Strong cut to put pressure on HUF – Commerzbank