06:14 AM EDT, 09/23/2025 (MT Newswires) -- Hungary's central bank (MNB) is expected to leave rates at 6.50% on Tuesday and present a new forecast, said ING.

Forward guidance should remain hawkish and the bank is unlikely to see much change here. The new forecast shouldn't see too many changes from the last version in June, and overall, the meeting seems more like a non-event and a confirmation of the MNB's previous stance.

As the economic data -- including inflation and gross domestic product figures -- wasn't significantly different to the MNB's June staff projections, ING doesn't think the central bank can justify a dovish shift.

While the bank still expects a total of 100bps of easing in 2026, ING has updated the profile of the MNB rate cut cycle. Rather than gradual easing, the bank anticipates a back-loaded cycle starting in the second half of 2026.

This will stabilize the forint (HUF) in the 380-395 range over the next five quarters, providing a better opportunity to accelerate the reduction of inflation expectations and reset corporate mindsets regarding the forint's behavior and their own pricing habits.

EUR/HUF has had a remarkable run during the summer months and sentiment towards the HUF has changed "significantly," wrote the bank in a note. A stronger currency doesn't necessarily mean automatic pricing in of more rate cuts anymore.

At the same time, the central bank has managed to build some market confidence in a longer-lasting carry, and the HUF has become a popular carry trade across the entire emerging market space. As a consequence, ING changed its view on the currency and believes that the current stronger levels will remain for a "longer" period of time.

Still, it's important to keep in mind that heavy long positioning makes the currency vulnerable to global shocks, added the bank. But at least in the short term, the HUF should continue to enjoy market favor and the hawkish MNB should be another positive signal for the EUR/HUF to settle below 390.