News

Hungary central bank seen hiking rate by 100 bps to 12.75% – Reuters poll

Hungary central bank seen hiking rate by 100 bps to 12.75% – Reuters poll By Reuters

Breaking News

‘;

Economy 56 minutes ago (Sep 23, 2022 13:21)

2/2
© Reuters. FILE PHOTO: National Bank of Hungary deputy governor, Barnabas Virag in Budapest, Hungary May 17, 2021. REUTERS/Krisztina Than
2/2

By Gergely Szakacs

BUDAPEST (Reuters) – The National Bank of Hungary is likely to raise its base rate by another 100 basis points to 12.75% next Tuesday, a Reuters poll showed, with further hikes seen by the end of the year despite the bank flagging a possible halt to its increases.

The median forecast of economists shows the NBH is set to maintain the 100 bps tightening pace delivered over the past months as Hungary grapples with a jump in inflation to two-decade highs amid surging food and energy costs.

Out of the 14 economists who gave forecasts, five, however, projected that the bank would slow the pace of rate hikes to 75 bps, taking the base rate to 12.5%, while one analyst pencilled in a larger 125 bps increase to 13%.

Deputy Governor Barnabas Virag told reporters on Thursday that the NBH, which has raised its base rate by more than 1,100 bps since June 2021 to the highest level in central Europe, could consider ending its rate rise cycle after Tuesday’s meeting.

He said the bank could raise interest rates by 50, 75 or 100 basis points, after which “all options are on the table”, including ending rate rises at once or phasing out the cycle with several smaller steps.

“We narrowly favour a 75 basis point hike at the National Bank of Hungary’s September meeting, taking the base rate and the one-week depo rate to 12.50%, although 100bp remains clearly on the table,” said economist Peter Virovacz at ING.

“The announcement of a prolongation of the price cap measures in basic food and fuel from the government will lower the near-term inflation peak, somewhat limiting concerns about consumer inflation expectations becoming more extreme.”

Last week Prime Minister Viktor Orban’s government extended price caps on fuels and basic foodstuffs by three months until the end of the year in a bid to shield households from soaring costs.

Even with the price caps in place, however, analysts polled by Reuters see headline inflation averaging 13.6% this year, rising to 13.95% in 2023 before a retreat to 4.3% by 2024.

Economic growth, however, is seen slowing sharply, to just 1.3% next year from 5% expected in 2022, implying a stagflation scenario for Hungary as the energy crisis hits major European economies that absorb most of its exports.

A new economic trajectory unveiled by Finance Minister Mihaly Varga earlier on Friday showed Hungary’s economy was set to contract for several quarters from the end of this year.

Hungary central bank seen hiking rate by 100 bps to 12.75% – Reuters poll

Long outliers, even euro zone bond curves are inverting fastBy Reuters – Sep 23, 2022

By Yoruk Bahceli, Tom Westbrook and Dhara Ranasinghe (Reuters) – As central banks hike interest rates at a pace not seen in decades to control inflation, the alarm among bond…

UK finance minister Kwarteng’s radical tax-cutting statementBy Reuters – Sep 23, 2022

LONDON (Reuters) – British finance minister Kwasi Kwarteng is presenting a mini-budget to parliament on Friday with the aim of cutting taxes and energy bills for households and…

Big UK tax cuts deepen selloff, dollar soars and bonds plungeBy Reuters – Sep 23, 2022

By Amanda Cooper and Tommy Wilkes LONDON (Reuters) – Stocks hit two-year lows on Friday, the dollar scaled a two-decade high and bonds sold off again as investors feared bigger…

Our Apps



Terms And Conditions
Privacy Policy
Risk Warning

© 2007-2022 Fusion Media Limited. All Rights Reserved.

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.

What's your reaction?

Excited
0
Happy
0
In Love
0
Not Sure
0
Silly
0

You may also like

Leave a reply

Your email address will not be published.

More in:News