Commerzbank analyst Tatha Ghose reports that Hungarian inflation has fallen back within target on core measures, which validates the Hungarian National Bank's (MNB) earlier rate cut and dovish policy shift [1]. Ghose notes that the preferred inflation measure, calculated from the month-on-month change of the seasonally-adjusted core price level, has moderated to within target for most core inflation measures [1]. He states that disinflationary forces are now becoming more entrenched and broad-based, suggesting that the previous divergence in inflation data was temporary [1].
The latest figures provide justification for further gradual easing by the MNB, with the pace and scale of future rate cuts dependent on continued moderation of price pressures and the stability of the external environment [1]. Ghose does not anticipate a negative impact of rate cuts on the forint, even in the medium-term, as the easing cycle is fundamentally backed by improvements in inflation [1].
Additionally, Ghose highlights that more significant global developments have been driving HUF movements over the past week, and a softer CPI print did not prevent the currency's rebound yesterday [1].
No specific dates, percentages, or numerical data regarding inflation or rate cuts are provided in the article. There are no analyst opinions suggesting negative market implications, and the overall tone is cautiously optimistic regarding the forint and the MNB's policy outlook [1].
CONCLUSION
Hungarian inflation has returned to target levels, supporting the MNB's dovish stance and rate cuts. Commerzbank expects further gradual easing, conditional on continued price moderation and stable external conditions, without negative effects on the forint. The market reaction has been positive, with the currency rebounding despite a softer CPI print.