Hungarian Forint: More Rate Hikes on Way

London analysts forecast more rate hikes from the National Bank (MNB). JP Morgan expects the MNB to raise the base rate by 25-basis points on Monday, followed by a similar hike a month later, bringing the two-week lending rate to 8.5%.

Other major banks and financial groups in London also predict that Hungary’s base rate will hit 8.5% this year. This is required to maintain the inflation targets, which will probably be revised upward again, they argued. An easing of the monetary policy can be expected in 2009.

Postponement of the proposed tax cuts is necessary to keep the budget deficit at 3.2% of GDP, in line with convergence plan targets, JP Morgan said, based on discussions with Hungarian officials.

This news item is one of many published daily by HATC, a premier subscription news service which distributes English-language info about Hungary via email or fax. For a free trial of HATC follow this link and click on ‘Free Trial Subscription’.

Hungarian forint, base rate, exchange rates, rate hikes, budget, money, monetary policy, inflation