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- EUR/HUF: Forint to weaken amid market’s concerns about MNB’s tightening – Commerzbank
EUR/HUF: Forint to weaken amid market’s concerns about MNB’s tightening – Commerzbank
The Hungarian National Bank (MNB) hiked its main base rate by 50bp earlier in the week and is expected to follow up with a 30bp hike to its one-week depo rate today.
MNB expected to hike rate by 30bp
“MNB will take the depo rate to 6.75%. This is a pretty high-interest rate level for Hungary in absolute terms of course, but the market appears to be increasingly impatient about MNB’s monetary tightening, which results in notable HUF underperformance.”
“A suggestion that monetary tightening can happen more gradually, at a relatively routine pace, is something the FX market appears to dislike.”
“The smaller hike to the depo rate (which effectively acts as upper-bound for the base rate) further intensifies the market’s concerns – hence, we expect HUF to weaken further.”
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