– Hungary’s central bank held its base rate at 2.1% this week. It maintains its view that growth is stable and inflation will reach 3% towards end-2015. Thus, it expects to keep its policy rate unchanged for an extended period “if the assumptions underlying the Bank’s projections hold.” “We think that the NBH is too optimistic in its forecast that inflation will reach the target next year. We also think growth will come under pressure.
We retain our forecast that the NBH will begin cutting in Q1 15, reducing its policy rate to 1.5% in Q2 15″ – said Barclays Capital in a note to its clients on Friday.
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