Yesterday, the Hungarian Forint rallied noticeably after the central bank kept all policy parameters on hold. Economists at ING expect the EUR/HUF pair to ove below the 380 level for the rest of the week.

NBH will remain cautious, patient and disciplined

“The most important takeaway from this month's rate-setting meeting is that the NBH will remain cautious, patient and disciplined.”

“The NBH has made it clear that priced-in rate cuts are not on the table at the moment, which should keep FX carry by far the highest in the region. This was the main reason why the Forint was one of the most popular macro trades within the EM space during January and February.”

“We believe that current market conditions along with the hawkish NBH are enticing investors to return to Hungary and the HUF has further room to rally. As such, we expect the Forint to settle below 380 EUR/HUF for the rest of the week.”