Hungary’s easing cycle nearing an end

The press release accompanying today’s decision by the National Bank of Hungary to lower its policy interest rate by 15bp to 1.50% hinted that the easing cycle has a little further to run. We have revised our rate forecast and have pencilled in an additional 10bp cut, to 1.40%, at the next Council meeting. Taking a step back, though, the big picture is that inflation is likely to remain below target both this year and next, which should allow monetary policy to remain accommodative.