The National Bank of Hungary’s Monetary Council resumed the easing cycle of the central bank’s key rate this week, although the 15 basis points reduction was lower than the 20 points tipped by most analysts. They said favourable data on GDP, retail sales, wages and employment as well as the low inflationary pressure prompted the cut. The move saw the forint strengthen to a 14-month high of below 300 against the euro. After a rate-setting meeting last July, the Monetary Council said it had wound up the easing cycle, which started almost five years earlier. According to experts, the current cycle will not be long and could be over by July when the base rate could be as low as 1.5-1.6 per cent. The central bank also raised its forecast for 2015 economic output growth to 3.2%, up sharply from the 2.3% growth forecast published in December.
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