Hungarian Forint: NBH easing path and FX pressure – ING

FXStreetJul 21, 2026 11:16 AM

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ING’s Frantisek Taborsky expects the National Bank of Hungary (NBH) to cut rates by 25bp to 5.75%, continuing its easing cycle despite recent FX and rates pressure. He argues the sell-off in Hungarian Forint (HUF) assets reflects positioning rather than fundamentals and sees scope for a more dovish market stance. Taborsky forecasts the policy rate at 5.00% this year and 4.00% in 2028, with room to rebuild forint longs.

Forint under pressure as NBH cuts

"The National Bank of Hungary is likely to cut rates by another 25bp to 5.75% today. The central bank restarted its easing cycle in June and committed to further cuts in July and August. A new forecast is due in September, when the NBH should reassess its next steps."

"While FX and rates have come under significant global pressure, triggering the largest sell-off since the April general elections, the situation likely looks more stable from the central bank’s perspective than from the market’s."

"June inflation again undershot the NBH’s forecast, and the governor last week described EUR/HUF around 355-360 as stable. Overall, we expect the NBH to maintain its current rhetoric."

"As a result, we expect the sell-off to fade at the first signs of global relief. The market now prices slightly more than 75bp of easing, including today’s meeting, and a terminal rate between 4.75% and 5.00%. We expect the policy rate to reach 5.00% this year and 4.00% in 2028. We therefore see room for the market to return to a more dovish stance and for investors to rebuild forint longs, depending on the global backdrop."

"The market has already priced out a large share of expected rate cuts after recent pressure on HUF assets, which underperformed not only within CEE but also across emerging markets. In our view, this reflects heavy long positioning rather than a deterioration in the local fundamentals, which remain constructive."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

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