No Slowdown In Hungary's MNB Rate Cut Drive

  • 19 Feb 2014 8:00 AM
No Slowdown In Hungary's MNB Rate Cut Drive
The MNB’s monetary council surprised observers with a larger base rate cut than expected yesterday, lowering the figure from 2.85% to 2.7%, causing the forint to weaken from 308.3 per euro to 310.

The monetary council argued that the Hungarian economy is fundamentally different from those of other emerging market countries, which are considered vulnerable.

The MNB considers the recent hit on emerging markets a one-off event, when investors realised that Hungary is not Turkey, analyst Peter Attard Montalto of Nomura commented.

Disagreeing with the MNB’s assessment, he said the rate cut leaves Hungary more exposed to the markets, as tension concerning emerging markets will not go away.

Source: Hungary Around the Clock

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