![]() This is the impact of lower energy prices. The fourth quarter (preliminary) current account deficit came in at €3.95bn, showing a €0.52bn improvement over a quarter. And the improved global sentiment around energy prices has only just started to translate into hard evidence: the December trade balance showed a deficit of only €154m (vs €1.2bn in November). However, Hungary is still experiencing high energy prices at the back end, so there has been little relief, so far. The emerging market relief rally on dropping energy prices has fuelled an improvement in global sentiment as well. When it comes to market sentiment, the market’s view is clearly positive about Hungary EUR/HUF is now flirting with 380, in contrast with the 400 seen before the last rate-setting meeting. There has been a lot of improvement in the general situation. This general risk sentiment is defined by the combination of external risks (war, global monetary policy, energy, general investor sentiment) and internal risks (EU funds, current account imbalance). ![]() The National Bank of Hungary (NBH) has made it clear on several occasions that the temporary and targeted measures (introduced in mid-October) will remain until there is a material and permanent improvement in the general risk sentiment.
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