Hungary: NBH uncomfortable with EUR/HUF above 340 – TDS

The NBH has made it clear that it is getting increasingly uncomfortable with EUR/HUF above 340. The pair is now trading at 355.0475. Analysts at TD Securities expect both the NBH and government to adopt further expansionary measures.

Key quotes

“We expect all key rates to stay on hold, in line with the almost unanimous consensus.” 

“The NBH decision would have no impact on EUR/HUF if no new measures are introduced, or could move the pair slightly higher in the case of some moderate additional easing.”

“Further fiscal measures could also push EUR/HUF higher, especially if they weigh more than 2-3% of GDP. The emergency bill is likely to have no immediate impact on FX.”