Hungary's base rate seen unchanged next week amid forint wobbles
reuters://realtime/verb=Open/url=cpurl://apps.cp./Apps/cb-polls?s=GCR01+46+D&st=Menu+G+C Reuters Hungary central bank rate forecasts
reuters://realtime/verb=Open/url=cpurl://apps.cp./Apps/econ-polls?RIC=HUCPIAP Reuters Hungary average inflation forecasts
reuters://realtime/verb=Open/url=cpurl://apps.cp./Apps/econ-polls?RIC=HUGDPAP Reuters Hungary GDP forecasts
By Gergely Szakacs
BUDAPEST, Nov 15 (Reuters) -Hungary's central bank looks set to leave its base rate at 6.5%, the European Union's joint highest level, after a sharp fall in the forint following the re-election of Donald Trump, whose trade tariff plans could strongly hit central Europe.
The forint EURHUF= has fallen nearly 3% since the bank's Sept. 24 rate cut, hitting a 22-month low, and is down around 6% against the euro this year, making it the region's worst-performing currency.
Thirteen out of 14 economists surveyed between Nov. 11 and 15 said the National Bank of Hungary would keep its base rate unchanged next Tuesday, on a par with that in neighbouring Romania, with one analyst holding an outside bet for a 25-basis-point reduction.
Hungary's central bank has warned that currency falls are feeding into prices more quickly than before, raising upside risks to inflation, which scaled the EU's highest levels of more than 25% in the first quarter of 2023.
"We expect the NBH to remain on hold next week as FX depreciation is creating upside risks to the inflation outlook," Morgan Stanley economists said.
"We see significant risks that the NBH will keep its policy rate unchanged in all of 4Q24 and 1Q25 as it awaits more clarity on the global trade growth outlook."
ING said export-reliant central Europe was "fully exposed" to the ramifications of Trump's planned overhaul of U.S. trade policy despite not having close direct ties with the United States.
Economists polled by Reuters see no more rate cuts in Hungary by the end of this year, erasing bets for another 25 bps worth of easing projected in last month's survey.
The Czech National Bank discussed weaker crown exchange rate assumptions in its forecast, with Vice-Governor Eva Zamrazilova pointing to this as "sufficient grounds for putting the rate-cutting process on hold" as she backed steady rates last week.
Romania's central bank also left its main rate steady last week, as expected, while Poland's central bank is likely to avoid rate cuts until the first half of next year amid uncertainty over household energy price subsidies.
Writing by Gergely Szakacs
Additional reporting by Jason Hovet in PRAGUE
Editing by Christina Fincher
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