Matolcsy flags possible rate rise in June 


György Matolcsy

National Bank of Hungary (MNB) governor György Matolcsy said the central bank could raise its key interest rate in June at a conference organized by business daily Világgazdaság on Wednesday.

Matolcsy said a turnaround in monetary policy could begin in June if the members of the MNB's rate-setting Monetary Council see fit.

He added that a prolonged rise in inflation could put the economic recovery at risk.

He said the economy could weather a rate rise.

MNB deputy governor Barnabas Virág told journalists in May that the Monetary Council could weigh a rise in the base rate at a monthly policy meeting in June.

"We must not underestimate the risks of a sustained rise in inflation, and we will react to inflation risks proactively," he said.

MNB policymakers have kept the base rate on hold at 0.60% since last summer, but inflation reached 5.1% in April and May, well outside of the +/- one-percentage-point tolerance band around the central bank's 3% mid-term target.


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