CEE FX: Hungary favoured, Romania and Czech on hold – ING

ING’s Frantisek Taborsky expects March inflation in Romania to stay above 10% in coming months, peaking near 11%, keeping the National Bank of Romania on hold with no rate cuts in 2026. In Czech Republic, he sees CNB unchanged despite firmer inflation and limited scope for EUR/CZK to revisit 24.250. ING remains broadly bullish on Hungary, looking for EUR/HUF to stabilise in the 355–360 range.

Romania, Czech policy steady as Hungary preferred

"Today, we will see more inflation figures for March in the CEE region. In Romania, the morning figures showed an increase from 9.3% to 9.9% YoY, above market expectations."

"We expect inflation to exceed/continue above 10% in the coming months, with a peak in April around 11%. This should keep the National Bank of Romania on hold for a longer period and we do not expect rate cuts this year."

"In the Czech Republic, the final estimate of March inflation will be published, where the flash showed an increase from 1.4% to 1.9%, below market expectations."

"The question is where core inflation moved from February's 2.7%, but for now, like other central banks in the region, we see the CNB unchanged this year."

"EUR/CZK is gradually grinding down and with levels below 24.350 it is not far from 24.250, ahead of US-Iran levels. Given the geopolitical uncertainty and the two CNB rate hikes priced in, we do not see the conditions for a return to these levels ​​at this time."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)