Hungarian Forint Higher vs. Euro After Central Bank Announcement

The Hungarian forint gained on the euro and was stable against the US dollar today as Hungary’s central bank signaled about an end to its monetary easing cycle.
The Magyar Nemzeti Bank announced today that it is cutting its main interest rate by 15 basis points to 0.9%. Yet the central bank signaled that the rates are likely to remain stable for a while after the cut. The bank said in the statement:

In the Council’s assessment, with the current 15 basis point reduction the policy rate has reached the level of 0.9 per cent which ensures the medium-term achievement of the inflation target and a corresponding degree of support to the economy.

And then the MNB added:

Based on available information, the inflation outlook and the cyclical position of the real economy point to maintaining the 0.9 per cent base rate for an extended period.

Fitch Rating lifted Hungary’s credit rating to an investment grade on May 20. Yet the forint fell to the lowest level since January 12 on Monday amid speculations about deeper interest rate cuts.
USD/HUF was basically unchanged at 282.99 as of 20:08 GMT today. Meanwhile, EUR/HUF dropped from 317.56 to 315.23.

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