NBH could intervene with other measures to lower medium and long-term rates: UniCredit

Quotes from UniCredit Research:

- National Bank of Hungary (NBH) expanded the Funding for Growth Scheme (FGS) by HUF 500bn (1.6% of GDP). The most likely outcome of the FGS expansion is a slight boost to growth and very little impact on interest rates. This means that the NBH could intervene with other measures to lower medium and long-term rates. 

- The NBH mentioned previously that it could try to boost the mortgage bond market, with measures currently being discussed with banks. The NBH could also impose minimum quotas on long-term bank financing through mortgage bonds and become a buyer in the secondary market (QE-like measures). 

- NBH representatives mentioned the possibility of sovereign QE, but Mr. Matolcsy dismissed this possibility in the short run. A failure of the FGS+ would also increase the likelihood of deeper rate cuts. At the moment, we are expecting cuts to 1.50% starting in March.