The committee voted 12 for and 2 against, with 2 abstentions, for Dániel Palotai, who could become the fourth deputy governor following amendments to the Central Bank Act.
In testimony before the committee, Palotai said Hungary’s small and open economy was highly exposed to trends in the global economy, such as slowing economic growth, strengthening inflation risk and growing uncertainty.
Movement in an increasingly protectionist direction poses challenges for the Hungarian economy, he added.
Palotai warned that the higher degree of uncertainty was causing businesses to postpone investments and to restructure their supply chains with greater frequency. Households are also adjusting their consumption and saving habits to higher risks, he added.
He acknowledged that achieving and maintaining price stability was the primary task of MNB, requiring a reduction of inflation to the 3% mid-term target.
He also highlighted the importance of anchoring inflation expectations amid persistent pressure indicated by core inflation and the price of market services.
Palotai said MNB aimed to contribute to strengthening financial market stability with transparent decision-making and carefully calibrated guidance. Amid the current uncertainty, he said data-driven, flexible monetary policy was the right response to low growth and persistently high inflation.
He added that a “cautious, patient, and stability-oriented” approach was necessary. Fielding questions, Palotai said central bank governor Mihály Varga had signalled that he would be in charge of international relations at MNB.
The committee also cleared the nomination of József Dancsó as a new member of MNB’s rate-setting Monetary Council.
Under the amendments to the Central Bank Act, the number of policymakers is set to rise from nine to eleven.
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