Twin Deficits Still A Worry

October 2004 | Market Strategy

The National Bank of Hungary (NBH) has cut the two-week repo rate by 50bps to 10.50%, taking total monetary easing this year to 200bps. This move has come on the back of the recent disinflationary cycle, which has seen CPI fall from 7.6% in May to 6.6% y-o-y in September. This has given the central bank some room for manoeuvre, when taken together with falling bond yields. The NBH has long indicated that it would view higher levels of market confidence as a key driver of interest rate cuts. That said, it is still too early to become bullish on

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