Reinforced NBH hawkishness might help EUR/HUF visit the sub-400 area in 2023 – ING

The National Bank of Hungary decided to maintain the monetary setup as it is when it gathered for the last time in 2022. The recent meeting strengthened the positive direction of the Forint, in the view of economists at ING.

"Whatever it takes" stance remains with a hawkish twist

“The National Bank of Hungary repeated its ‘whatever it takes’ stance at its last rate setting meeting in 2022. Moreover, it added a bit more hawkish flavour to its forward guidance, possibly due to the upgraded 2023 inflation outlook.”

“NBH managed to maintain or even strengthen the hawkish market sentiment, which should at least keep the current momentum of the Forint. In addition, the NBH extended the programme of providing hard currency to energy importers for the next months, which is another positive news for the Forint, delaying some of the selling pressure on the domestic currency.”

“Beyond the NBH meeting, conditions are also positive for the forint at the global level. Gas prices are heading lower and implied rates in Hungary, on the other hand, are again near record high levels providing a shield for potential selling pressures.” 

“We remain bullish on the Forint and expect further appreciation towards 400 EUR/HUF by year-end and below this level next year.”