Receive 5Y HUF IRS

Since early March, Hungarian 5Y swap rates have surged to 6.75% (before retracting to 6.58%) , driven by a wave of optimism following the announcements of an €800 billion European defense program and €500 billion in German infrastructure investments. This increase in Hungarian long-term rates is also a response to inflation, which hit 5.6% in February, dampening expectations for immediate rate cuts by the central bank. Hungarian long-term rates now offer a good opportunity, with an attractive risk-reward profile. Inflation is poised to slow down in the coming months, fueled by the robust performance of the HUF and declining oil prices. As a result, HUF 5Y swap rates are e xpected to decline in response to the 50 b ps reduction in the central bank's key rates that we anticipate in the second half of the year . Moreover , a peace agreement between Ukraine and Russia could encourage an influx of capital seeking high returns.