HUF: The NBH means business, expect a strong set of dovish measures - ING
|Viraj Patel, Foreign Exchange Strategist at ING, suggests that they expect the NBH to cut the O/N deposit rate by 5 to 10bp, cut the 3M deposit facility cap by HUF100-150bn and further postpone the date of reaching the CPI target.
Key Quotes
“Delivering such a dovish set of measures would send a strong signal to the market that the NBH means business, with EUR/HUF breaking above the 311.00 level. While we recognize that recent HUF weakness may see the NBH to keep its powder dry, we note that by not delivering what is expected by the market the forint would likely strengthen sharply – and force the NBH to eventually ease policy by more than is currently needed.”
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