The National Bank of Hungary cut the 2W deposit rate by 25 bps this Monday to 9.50%, citing the rapidly declining inflation, allowing for achieving the target for 2002, as well as the strong forint and the narrowing current account and budget deficits. We believe that the bank will continue to cut rates gradually as long as the inflation declines and the forint keeps strong. Next meeting is scheduled for January 21.
(Jakub Dvorak, CSOB)