Today Hungarian central bank reference meeting takes place, but as the market widely expects, that there will be no change in rates we believe that this meeting will be largely market neutral.
Our view: Our expectations are in line with the market. According to our view current strong levels of the forint as well as the recent dovish comments from the Governor of the National Bank of Hungary indicate that no more rate hikes are on the way. We believe that not even the GDP revision upwards will persuade doves on the MPC to adopt a more restrictive monetary policy because the growth is being driven by exports while the decline in domestic demand is starting to be obvious.