National Bank of Hungary likely to stand pat in July

The Hungarian central bank is set to meet this month for its policy decision. Given the NBH’s previous statements, the figure rather affirms that the central bank will stand pat in July too, stated KBC Market Research in a report. The loose conditions might be altered in the next 12 months gradually if they see evidence for inflation stabilizing around the 3 percent year-on-year inflation target.

There is possibility of the National Bank of Hungary to follow ECB’s moves, which signifies that the Hungarian central bank might switch to a less dovish stance in September. It is also significant when Hungary begins to receive the money from the EU funds, as the central bank increased the HUF liquidity on the market in May and June to assist the issuance of Debt Management Agency.

“Once Hungary starts to receive the money, NBH may start to cut back the FX swaps tender as well”, added KBC Market Research.