- The MNB sees higher inflation, but flat official rates. The IMF loan might bring easing.
- Calm Czech markets eye CNB Board meeting
As expected, the Hungarian central bank left its base rate unchanged at 7.0%. The market reaction to the central bank decision was very calm, despite the fact that the MNB had to revise its inflation forecast higher and the new projection sees flat official rate for several quarters. Nevertheless as MNB President Simor indicated there will be some room for monetary easing, if the government agrees on a financial aid with the IMF/EU. It is worth to add that we believe that the loan agreement could come in May-June.
Regarding developments the trading on CE forex and fixed-income markets remain quite, while the Czech markets are awaiting tomorrow’s CNB Board meeting.