ING Says Risks of Weaker Forint Are High Ahead of Tuesday's Policy Meeting at Hungary's Central Bank

06:03 AM EST, 12/16/2025 (MT Newswires) -- Hungary's central bank (MNB) is very likely to leave rates unchanged at 6.50% on Tuesday, said ING.

The main focus will be on MNB's new forecast and forward guidance, wrote the bank in a note to clients. The revisions to the gross domestic product and inflation forecasts for 2025 will be minor, with only slight downward adjustments.

More interesting is the impact of the extended and expanded price shield measures, as well as the increased fiscal targets, on the outlook for 2026 and beyond, stated ING. On top of that, a stronger forint (HUF) and lower energy prices are changing the landscape, too.

Overall, the bank anticipates a reduced 2026 inflation forecast and a potential upward revision to the 2027 inflation projection driven by base effects. On the GDP outlook, a minor reduction to the 2026 forecast is possible. The full September Inflation Report will be released on Thursday.

Markets remain on the hawkish side with almost three rate cuts priced in overall and a terminal rate around 5.80%, pointed out ING. Markets are used to a hawkish tone from the central bank and, as such, ING sees risk on the dovish side.

Markets will look for signs of whether the central bank is open to thinking about rate cuts next year, added the bank. EUR/HUF stabilized in the 384-385 range on Monday, but given ING's view on rates, the risk of a weaker forint on Tuesday is high. If the MNB indicates a shift in thinking, markets will likely test the 386 levels, according to the bank.

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