WOOD Flash – Hungary macro: MNB begins tapering amid elevated inflationary pressures
The Monetary Policy Council (MPC) of the Hungarian National Bank (MNB) raised the base rate by 30bp to 1.50% on 24 August, in line with both our expectations and consensus. The interest rate corridor was raised by the same magnitude, to maintain a symmetric +/-0.95pp on both sides. The MPC also announced that it would begin tapering its purchases under the QE programme on a quarterly basis, with immediate effect. The MPC softened its language, which was consistent with our baseline scenario of a rapid but modest tightening cycle. It has raised the base rate by 90bp, so far, since starting its tightening cycle in June, and our base case expects a further 100-125bp of tightening by end-2022E.
WOOD & Company is the leading investment bank in Emerging Europe. Founded in 1991 and head-quartered in Prague, our footprint spans the region and touches investors around the globe.
A pioneer in Emerging Europe, WOOD executed many of the first CEE equity trades and landmark investment banking transactions. Our electronic trading platform was the first in the region, and remains the best. We are continually expanding our relevance and reach in these ever-evolving markets.
Our equity market share reflects our stature: 7% in Warsaw, 20% in Bucharest, 16% in Hungary, 40% in Prague and 5% in Vienna. Our distribution is unparalleled, with the largest salesforce in the region, servicing a uniquely diverse investor base.
We couple local expertise with a truly international perspective. With offices on the ground in the region, and in key financial hubs such as London and Milano, we are never far from our clients and we remain at the forefront of what’s afoot in the CEE emerging and frontier landscape.
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