EUR/HUF to rise to the 390.00 level in coming weeks if jitters surrounding EU banks continue – Commerzbank

Hungary’s National Bank (MNB) will hold a rate setting meeting today. No change in base rate from the existing 13% is anticipated. Economists at Commerzbank believe that the EUR/HUF pair could reach the 390 mark in the coming weeks.

Hungary's MNB on hold in volatile environment

“We do not anticipate any cut to this rate today.”

“While there could have been some improvement in Hungarian core inflation dynamics in recent months, Hungary’s inflation outlook is still the most worrisome amongst the CE3. Whichever definition of policy rate we want to use, Hungary’s real interest rate works out to deeply negative. This keeps the exchange rate vulnerable.” 

“At this very time, the Forint appears relatively overvalued given the broader risk situation – this probably owes to the strong Euro, but we expect EUR/HUF to rise to the 390.00 level in coming weeks if current market jitters surrounding European banks were to continue.”