No monetary policy change likely by National Bank of Hungary

The National Bank of Hungary (MNB) holds its MPC meeting today, no change in the benchmark rate is expected. The rate easing cycle is likely to be re-opened in Hungary and Poland, but this will take more of a disinflationary trend to emerge before the time is right. 

Between Poland and Hungary, the latter is likely to think about easing later, core inflation is running 1pp higher in Hungary, and headline inflation will also be cosmetically boosted in 2016 by the base effect from utility price cuts. 

"Nevertheless, inflation will eventually undershoot MNB's forecasts and slower GDP growth will also become a factor in 2016, which is why 1% benchmark rate is forecasted by end-2016 compared with 1.35% now. Meanwhile, EUR-HUF will be hovering in the 310.00-315.00 region through end-2015", says Commerzbank.