Hungary Is Likely to Slow Rate Cuts After Central Bank Spat Hits Forint

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Hungary will most likely slow the pace of its rate cuts Tuesday as the weakness of the forint limits room to lower the European Union’s highest borrowing costs despite a steep drop in inflation.

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The National Bank of Hungary will probably cut its benchmark interest rate by 75 basis points to 8.25%, according to 16 economists out of 22 surveyed by Bloomberg. The rest are split between calls ranging from as little as 25 basis points to as much as a full percentage point. Money market traders turned more cautious about further cuts. They now see only 124 basis points of monetary easing in the next three months, down from 218 basis points at the end of last month.

 

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