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Dec 18, 2019

National Bank of Hungary leaves base rate on hold

NBH has left the base rate unchanged at 0.90 percent at a meeting held on Tuesday.

The National Bank of Hungary has left the base rate unchanged at 0.90 percent at a meeting held on Tuesday.

The Council has not changed the rate since May 2016, though it has tweaked monetary policy on a quarterly basis, coinciding with the publication of the central bank’s Inflation Report.

According to MTI, the bank raised the forecast for 2020 headline inflation to 3.5 percent from 3.4 percent in the previous Inflation Report. But it left the forecasts for 2019 and 2021 unchanged, both at 3.3 percent.

The Council said in a statement that CPI “is expected to rise further temporarily until January 2020, mainly reflecting the base effect of fuel prices and the increase in food prices”.

“Following a gradual decline, inflation is likely to stabilize at the 3 percent inflation target in the second half of the forecast horizon,” the rate-setters added.

The Bank’s measure of core inflation excluding indirect tax effects “is likely to decrease from the first quarter of 2020”, the Council said. It noted that inflation expectations “remain anchored”.

Photo credit: kurt.hu