Forint Gains on Report of Potential Rate Cut Pause

Hungary's forint gained about 1.1% against the euro at Friday's official fixing, following a report that the central bank may stop cutting rates this month.

The European Central Bank's reference series put EUR/HUF at 363.28 on September 4, after falling sharply from its earlier peak of 368.20 to 363.28.

The move is attributed to a potential pause in rate cuts by the Magyar Nemzeti Bank (MNB), which could maintain a 4.3-point rate cushion without surrendering positive carry.

On August 25, the MNB cut its base rate by 25 basis points to 5.50%, but with Hungary's July consumer inflation at only 1.2%, the bank has room to pause cuts without compromising its target.