The most important domestic economic event of the week is the interest rate setting meeting of the MNB. In May of last year, it started to reduce the interest rate from the 18 percent reference rate,
ON TUESDAY, THE CENTRAL BANK REDUCED THE BASE RATE BY 25 BASIC POINTS, THUS PUTTING THE BRAKES ON AFTER THE 50 BASIC POINT RATE CUT IN PREVIOUS MONTHS.
We can notice this in everyday life, as those who want to take out a loan, for example to buy a home, may encounter lower and lower interest rates, while savers may also experience the same. While a year ago mortgage loan offers were above 10 percent, in May we were able to meet mortgage loan offers below 7 percent in bank branches (although government measures also played a role in this).
At the same time, the decrease in the base interest rate means less and less support for our currency, so the population could also feel the lower interest rates due to the weakening of the forint.
The forint awaited the decision by strengthening
Makronóm Intézet and MBH, which previously told our newspaper, do not expect the forint to stay at or above the level of 400 against the euro.
“One of the main reasons for this may be the MNB’s interest rate policy, as a permanent weakening of the forint would endanger the inflation path, so in the event of an increasing risk of this, the central bank may slow down or postpone the pace of further interest rate cuts,” noted Márta Balog-Béki, who believes that the country’s external balance situation is also very strong, which in the longer term does not justify a further substantial weakening of the forint.
On Friday evening, the forint was still at the level of 398 against the euro, then a correction began on Monday, and on Tuesday the Hungarian currency was already below the level of 396, waiting for the central bank’s interest rate decision.
AFTER THE INTEREST RATE DECISION, THE HUNGARIAN CURRENCY WEAKENED, STRENGTHENING AGAINST THE EURO FROM THE LEVEL OF 396 TO BELOW 395.
From the point of view of the forint exchange rate, perhaps even more important than the interest rate decision is what Barnabás Virág, the vice president of the central bank, will say about the factors hiding in the background and the future of the interest rate path at 4 p.m.
(Cover photo: Kitti Kolumbán / Index)
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2024-06-18 14:07:18