The forint is trying to strengthen – the central bank will also speak in the afternoon

Waiting is characteristic of the foreign exchange market before the interest rate decision of the Magyar Nemzeti Bank due at 2:00 p.m., the forint shows a faint strengthening, but its performance is not convincing for now.

The euro-forint cross rate fluctuates at the 401 level, and 370 forints are being asked for one dollar. The fact that a Japanese credit rating agency (R&I) did not have a particular effect on the Hungarian currency confirmedcontinues to recommend Hungarian government bonds for investment, the real benchmark in this regard will arrive on Friday, S&P gives its opinion, where we have a rating of BBB-, with a stable outlook.

Erste preview according to him, it is unlikely that they would worsen the outlook: although the budget deficit is high, the government has taken steps to reduce it (plus, the budget is in a worse state than Hungary’s in Slovakia, Romania and Poland, among the countries in the region).

But until then, another test for the forint awaits. He announces at 2 p.m Hungarian National Bankhow did he decide on interest rates, analysts expect maintenance without exception, i.e. a base interest rate of 6.5 percent. The reason for certainty is that Barnabás Virág, the vice president of the MNB, said in several forums last week that the interest rate reduction cycle may be paused not only in October, but even longer. Contrary to custom, this time Vice President Csaba Kandracs, not Barnabás Virág, will hold the press conference following the decision at 3 p.m.

According to Raiffeisen’s analysts, the MNB can continue with the easing cycle in December at the earliest, but a market environment that makes this possible only next year cannot be ruled out. Bad news, they say

there is little chance that the central bank will be able to bring the euro-forint exchange rate back below the level of 400 on its own in the short term.

And ING Bank wrote in its note on Tuesday that the most important message of the press conference is how long the suspension of the interest rate reduction cycle will last. For sure, the central bank is also aware of how much the HUF is vulnerable at the momentso you can expect stricter messages from them. If this happens, it could strengthen the forint in the afternoon, but it is still too early to expect a significant appreciation.