May inflation at 1.8% YoY reinforces expectations for a June rate cut by Hungary’s central bank, with 75 basis points of easing seen this year.
Hungary’s forint remained stable near 355 against the euro as investors priced in an imminent rate-cutting cycle by the National Bank of Hungary. May inflation held at 1.8% year-on-year, below the central bank’s 3% forecast and market expectations of 2.2%, solidifying disinflation trends.
Analysts expect the NBH to begin easing in June with a 25-basis-point cut to 6.00%, followed by a total of 75 basis points of reductions this year. Governor Zoltan Kurali’s recent comments suggest a cautious approach, ruling out larger initial cuts.
EUR/HUF stability at 355 reflects growing conviction in rate cuts, with a mid-year target of 350 as inflation remains anchored despite global inflationary pressures.