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MNB: Rate-setters maintain guidance for continued ʼeasingʼ

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The National Bank of Hungaryʼs (MNB) Monetary Council maintained their guidance for continued "cautious easing" at a policy meeting late in May, the condensed minutes of the meeting released today reveal.

"The overwhelming majority of decision-makers judged it necessary to maintain the previous forward guidance and agreed that cautious easing of monetary conditions might continue as long as it supports the achievement of the medium-term inflation target," according to the minutes.

The Council voted unanimously at the meeting, on May 26, to cut the central bankʼs key rate by 15 bp to 1.65%, in line with market expectations.

"In the Councilʼs judgement, the assumptions underlying the projections in the March Inflation Report continued to hold, under which the outlook for inflation and the cyclical position of the real economy pointed in the direction of a further reduction in the policy rate and loose monetary conditions for an extended period," the minutes show.


The Council noted that global investor sentiment had been "mostly unfavorable" in the recent period, citing tensions over Greeceʼs financing and weak U.S. macro data, and said " a cautious approach to monetary policy was warranted due to uncertainty in the global financial environment".

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