Matolcsy flags possible rate rise in June 

MNB

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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