Hungary rate-setters brush off speculation of rift

Interview

Two members of the National Bank of Hungary's Monetary Council dismissed speculation that there is sharp division among the central bank's rate-setters in an interview with Dow Jones on Tuesday.

Ferenc Gerhardt and György Kocziszky, who are external members of the Council, said the speculation – fueled by a number of non-unanimous votes in recent months – was untrue.

"Sometimes markets interpret a non-unanimous rate decision as a huge break within the Monetary Council. This is simply nonsense," Gerhardt told Dow Jones.

Kocziszky called the speculation "harmful" and said reports of tension between the Council and the MNB staff was the stuff of "urban legend".

"This would be a like a pilot not wanting to talk to his mechanic. I need to base my decisions on the research of the staff and this wouldn't work if there was a rift," he said.

Gerhardt said credibility was a "fundament of Monetary Council members' job description". "We must convey responsibility, predictability and drive the economy in a positive direction. Monetary Council members must disregard all other considerations," he added.

The Monetary Council has four external members and three internal members. At a rate-setting meeting in January, all three internal members voted to raise the bank's key rate by 50bp to 7.50% while the external members voted to keep the rate on hold.

ADVERTISEMENT

Business confidence edges up as consumer sentiment weakens Analysis

Business confidence edges up as consumer sentiment weakens

Opposition parties to begin PM candidate primaries Elections

Opposition parties to begin PM candidate primaries

New managing director at the helm of Wolt Hungary Appointments

New managing director at the helm of Wolt Hungary

Budapest bike-sharing scheme boasts record ridership City

Budapest bike-sharing scheme boasts record ridership

SUPPORT THE BUDAPEST BUSINESS JOURNAL

Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.