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Analysts at TD Securities suggest that in line with the unanimous consensus, they are expecting the NBH to keep all its rates on hold at today’s Monetary Council meeting.

Key Quotes

“At the March meeting the O/N Depo Rate was hiked by 10bps to -0.05%, but the accompanying language was very dovish, with Governor Matolcsy saying that the hike was a one-off and not the start of a tightening cycle. He also said that the amount of HUF liquidity provided through FX swaps would fall by about HUF 130bn and that BUBOR (presumably 3-month) “should rise no more, no less than 10bps”.”

“The FX swap book has already fallen by about this amount, but 3m BUBOR is up only about 3bps so further liquidity withdrawal may be indicated. The statement will probably repeat the message that “persistently buoyant domestic demand is boosting, but weakening external activity is restraining the pace of price increase”.”