ING economists Peter Virovacz and Frantisek Taborsky expect the National Bank of Hungary (NBH) to begin an easing cycle at its 24 February meeting. They forecast a 25bp cut, which would take the base rate to 6.25% after 16 months with no rate change.<\/p>\n
They also expect the +\/- 100bp interest rate corridor to move lower in line with the base rate change. Their outlook allows for another 25bp cut in March, depending on inflation and foreign exchange conditions.<\/p>\n
They note that the general election on 12 April could affect later decisions. They project that, if price and market conditions remain stable, one or two further rate cuts could follow before end-2026.<\/p>\n
Money market pricing has already factored in a series of 25bp cuts over the next couple of months. The article states it was created with the help of an Artificial Intelligence tool and reviewed by an editor.<\/p>\n
With the National Bank of Hungary poised to cut its base rate next week on February 24, we should ensure our positions are set for lower interest rates. Recent inflation data for January 2026, which came in at a manageable 3.6%, gives the central bank the green light for this move. We are looking at forward rate agreements and interest rate swaps that will profit as the expected 25 basis point cut materializes.<\/p>\n
This easing cycle puts direct downward pressure on the Hungarian forint. We should consider shorting the forint against the euro, as the EUR\/HUF exchange rate, currently stable around 394, is likely to test higher levels. Looking back at 2025, we saw the currency weaken significantly during periods of monetary easing, a pattern that is likely to repeat itself now.<\/p>\n
The general election on April 12 introduces a major point of uncertainty, so we need to watch volatility closely. We should look at buying options on the EUR\/HUF pair that expire after the election to hedge against or speculate on a significant currency move. Implied volatility for April contracts is already climbing from the lows we saw at the end of last year, suggesting the market is pricing in this risk.<\/p>\n
The expectation for one or two more cuts by the end of 2026 suggests this is the start of a trend, not a one-off adjustment. This supports holding longer-term positions that benefit from a falling yield curve, as Hungarian government bond yields will likely continue their descent from the 6.5% levels seen earlier this month. Any short-term strength in the forint should be viewed as an opportunity to build our short positions.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" ING expects Hungary\u2019s central bank to start easing on Feb 24, cutting 25bp, with further cuts possible.<\/p>\n","protected":false},"author":62,"featured_media":17026,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-42210","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/42210","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=42210"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/42210\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/17026"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=42210"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=42210"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=42210"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}