The National Bank of Hungary delivered what ING strategists are calling the final rate cut in its summer mini-cycle on Tuesday, though monetary easing is far from over. The central bank’s decision marks a temporary pause rather than an end to the cutting cycle, with ING expecting the easing path to extend well beyond the summer months.
The forint faces continued pressure as markets digest the implications of ongoing monetary loosening against a backdrop of persistent inflation concerns across Central Europe. Hungarian rate policy remains critical for carry trade positioning and regional forex flows, particularly as the NBH balances growth support against currency stability.
Traders focused on CEE currencies should recalibrate positions as the NBH appears committed to a longer easing trajectory than previously anticipated, potentially widening rate differentials with the ECB and Fed through year-end.
FXnCO Insight
Consider reducing forint exposure or adjusting carry trade strategies now, as extended rate cuts signal sustained downward pressure on HUF against major currencies through the remainder of 2024.
Source: FXStreet