Macroeconomic Forecast Hungary

In line with expectations, the National Bank of Hungary (NBH) cuts its key policy rate by 25bps on January 25, bringing the benchmark overnight borrowing rate to 6.00%. Going forward, while we believe the central bank's monetary easing cycle has further to run in the short term, with another 25bps cut likely at some point in Q1, we caution that the Monetary Council is unlikely to drastically reduce the main borrowing rate beyond this, with rates expected to bottom at 5.50% by end-H1.

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