Hungarian central bank likely to continue with loose monetary policy in months ahead

The Hungarian central bank is set to meet for its monetary policy next week. According to a KBC Market Research report, the loose monetary policy of the NBH might be continued in the months ahead. Next week, the most important question would be the detail of the new 5 and 10 year swap facility.

The NBH is expected to offer HUF 300 billion in the first quarter of 2018 evenly distributed among the months. The tenders would be on the auction days and therefore HUF 50 billion amount is expected every second Thursday and 60-40% or 70-30% in advance for 5-year swap, stated KBC Market Research.

“As the asset swap spreads are quite narrow recently, we think that NBH may give around 30bp lower swap levels to make the instrument attractive for banks”, added KBC Market Research.

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