It’s getting rather routine: another rate setting meeting at the Hungarian central bank, another rate cut of 25 basis points down to another record low rate. On Tuesday this pattern took the rate down for the ninth consecutive month to 4.75 per cent.
About the only upset in this otherwise well-rehearsed show was was a mistakenly sent alert on Bloomberg terminals that the rate had been reduced to a mere 1 per cent. Cue a flurry sell off in the forint, before the damage could be repaired (see chart) – and business was back to normal, with the Hungarian currency trading at Ft 299.48 to the euro at 5pm Europe time. Continue reading »
By Peter Attard Montalto of Nomura
The Hungarian central bank has on Thursday embarked on a risky strategy of postmodern policy in a bid to boost growth through lending via the provision of liquidity. It is labelled as a “Funding for Growth Scheme”.
So will it work? And longer term, what does it mean for the forint? Continue reading »
Hungary’s central bank cut its benchmark rate on Tuesday by 25 basis points to 5.5 per cent, in its sixth monthly cut in a row, amid concern about the recession-hit economy.
The bank acted despite recent weakness in the forint, which has this week touched the psychologically-important level of HUF300 to the euro for the first time since last June. Andras Simor, the governor whose term ends in March, has been under persistent government pressure to do more to simulate growth. Continue reading »
Yet more gloom and doom for Hungary: retail sales in November were down 4.1 per cent from a year earlier. The forint lost ground, trading at Ft297.95 to the euro at 1.30pm, after opening the day at Ft295.20.
The latest data means 11-month retail sales for last year are down by 2 per cent on 2011, with food, drink and tabacco down 0.6 per cent, and non-food retail down 3 per cent, the Hungarian Central Statistics Office reported. Even more tellingly, sales in November at furniture and electrical goods stores slumped 16.2 per cent. Continue reading »
The Hungarian central bank trimmed 25 basis points off the base rate on Tuesday, the fifth such easing in as many months.
The move, which leaves the benchmark rate at 5.75 per cent, raised a chorus of concerns among analysts that the dove-dominated monetary council could be heading towards a cut too far. This particularly given the forint’s weakening in the previous 24 hours, when – spurred by worries over who might take over at the central bank next spring – it lost roughly two per cent, slipped at one point on Tuesday morning to Ft290 to the euro. Continue reading »
Hungary’s central bank has cut interest rates by another 25 basis points to 5.75 per cent. This is the fifth cut in a row since August, despite the weakening forint.