The National bank of Hungary confirmed that it is using every opportunity to cut rates. 2W deposit rate stands at 10.25%.
Everything suggested that the central bank was going to cut rates in the near future. In the evaluation of its monetary policy last Monday, the bank said that inflation development would allow for it. After the ECB cut its rate by 50 bps, the forint strengthened to close 250 EUR/HUF and the industrial output decelerated strongly last week, the rate cut was only the matter of timing. The next meeting was scheduled for Monday November 19, and the inflation is due to Tuesday November 13, we therefore expected the cut by 50 bps to materialize next Monday. However, the bank decided not to wait for the regular meeting of the Monetary Committee and cut rates at today’s meeting of the monetary commission, who has the right to decide on rates outside the regular meeting. Today’s cut may be followed by yet another cut by the end of this year, as inflation is expected to decline further.
(Jakub Dvorak, CSOB)