Societe Generale strategists expect Hungary’s policy rate to fall to 5.0% by year-end, weighing on the forint after recent easing.
The Hungarian Forint (HUF) is under pressure after the Magyar Nemzeti Bank (MNB) cut its policy rate to 5.75% and indicated additional easing ahead. Strategists anticipate a terminal rate of 5.0% by year-end, suggesting further downside for the currency against the euro.
EUR/HUF recently bottomed near key support levels, but the central bank’s dovish stance has prompted a reassessment of the forint’s rally. Prior to the cut, the MNB had maintained a cautious approach, but recent inflation data and economic conditions have accelerated the shift toward looser policy.
Markets are now pricing in additional rate reductions, which could extend the forint’s decline if the easing cycle continues as expected.