Hungarian Forint: Dovish tilt keeps easing alive – Commerzbank
Commerzbank‘s Tatha Ghose reports that Hungary’s central bank Magyar Nemzeti Bank (MNB) cut its base rate to 5.75%, in line with expectations, and maintained its summer easing narrative. Despite recent Forint correction, the bank still sees room for further cuts while preserving positive real rates, with a reassessment in September. Communication was mildly dovish, though HUF continues to outperform peers like the Polish Zloty. Mini easing cycle continues “Hungarys National Bank (MNB) cut its base rate by 25bp to 5.75% yesterday, as had been unanimously expected by analysts. The decision itself did not carry surprise. MNB had already restarted its easing cycle in June, and the subsequent guidance had signalled room for further cuts during the summer months if favourable inflation and financial-market developments persisted.” “The more interesting message was that MNB did not use the recent correction in the forint as reason to back away from the mini easing cycle. The post-meeting statement noted that inflation developments had been more favourable than the June baseline, while the lower risk premium on domestic assets had persisted (we could argue the opposite – because HUF weakened sharply when the Iran war re-started – but, MNBs view appears more reasonable).” “Looking ahead, MNB sees room to
