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POLL-Hungary central bank to hold fire next week, may ease more later

* Base rate seen at 0.6%, O/N depo rate at -0.05%

* Some economists see scope for more rate easing in 2020

* Bank to meet after deeper-than-expected slump in Q2 GDP

* reuters://realtime/verb=Open/url=cpurl://apps.cp./Apps/cb-polls?RIC=HUINT%3DECI poll data

BUDAPEST, Aug 18 (Reuters) - The National Bank of Hungary (NBH) is likely to leave interest rates unchanged next week based on a Reuters poll of economists, some of whom expect another cut in its base rate this year after a deeper-than-expected slump in second-quarter economic output.

All 12 economists in an Aug. 17-18 survey said the NBH would leave its base rate on hold at 0.6% on Tuesday after 15-basis-point cuts in the last two months to shore up the economy hit by the COVID-19 pandemic.

Eight out of 11 economists who gave a forecast for the base rate at the end of 2020 say it would stay at its current level as the July inflation data published last week surprised significantly to the upside.

Three analysts, however, have pencilled in another 15-basis-point reduction later this year that would take the rate to 0.45% after a 13.6% plunge in second-quarter economic output, the worst among Hungary’s central European peers.

David Nemeth, an economist at K&H Bank, said that might tilt the balance in favour of more rate easing provided the forint , the region’s worst performer this year, stays near its current levels of around 350 per euro.

“I think the GDP fall is the stronger factor,” Nemeth said. “I expect inflation to inch lower in the autumn, which would give the bank some room to lower interest rates.

“I think they can squeeze in another cut.”

The NBH, which has deployed a range of tools, including bond purchases, to bolster growth, has ruled out further cuts in the base rate, saying it aimed to keep a safe distance from near-zero levels elsewhere in central Europe.

However, it had described its surprise June rate reduction, the first such move in four years, as a one-off measure, only to cut the rate further in July. (Reporting by Gergely Szakacs; editing by Barbara Lewis)

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