The Hungarian central bank’s (MNB’s) larger-than-expected 75bp cut to its base rate, from 13.00% to 12.25%, today suggests that policymakers are sticking to aggressive monetary easing. Our working assumption at this stage is that interest rates will be cut in 75bp steps for the time being, but we think it’s possible that the MNB could even shift back up to 100bp cuts by next year when inflation falls sharply.
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