Looks like the MNB may have intervened for the forint verbally yesterday

HUNGARY - In Brief 04 Sep 2026 by Istvan Racz

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Following a short period of weakening on external factors, which we dealt with in our previous note two days ago, the forint gained strength again yesterday, after a 'rumour' reported by Bloomberg that afternoon. The news was that at the next rate-setting meeting on September 22, the Monetary Council may stop reducing the base rate and, simultaneously, it may reduce the MNB's medium-term inflation target to 2.5% from the current 3%, to get closer to the ECB's 2% target, in the spirit of eventual euro convergence.Now, it seems that Bloomberg's mist generator did not work perfectly on this occasion. Its report referred to a source 'familiar with the matter', which can only be, thinking logically, the top management of the MNB. So, we have little doubt that in fact, we saw a clear case of verbal intervention for the forint yesterday. It looks like the MNB would not like the forint to go over to the northern side of the EURHUF 370 line permanently. The latter was, and probably still is, a realistic threat, in view of all the unfavourable external factors (see our note of September 2 on them), a Fitch Ratings comment (also published on the day before yesterday), which expressed some disappointment over the fact that the government had decided not to go for a more ambitious fiscal stabilisation effort in its 2026 budget amendment proposal, and the obvious uncertainty around the 2027 budget proposal, which is due in October.In addition, we have probably seen the bottom of the CPI-inflation cycle at 1.2% yoy in July. In August, fuel retail prices may have risen by at least 3% mom, according to pretty comprehensive preliminary information, and a similar rise is expected in Sept...