Rate-setters agree that ʼpersistent changeʼ to inflation outlook key
Photo by noppawan09/Shutterstock.com
The Monetary Council of the National Bank of Hungary (MNB) stressed that inflation would return to the tolerance band around the mid-term target in Q1 2020 and agreed that persistent change to the inflation outlook would determine the need for further measures at a monthly policy meeting in January, state news wire MTI reports.
Photo by noppawan09/Shutterstock.com
"Council Members were in full agreement that the necessity of further measures would be determined by the persistent change in the outlook for inflation, which would be monitored closely," the minutes of the rate-settersʼ monthly policy meeting late in January show.
As in its statement released after the policy meeting on January 28, the Council elaborated on the duration of the change to inflation outlook that could warrant policy steps with the inclusion of the word "persistent". In earlier communications, the Council had said only "future developments in the outlook for inflation" would be key to deciding the need for further policy measures.
Hungaryʼs 12-month consumer price index rose to 4.0pc in December, reaching the top edge of the +/- one percentage point tolerance band around the central bankʼs 3.0pc mid-term inflation target.
The Council members also acknowledged the impact the coronavirus outbreak could have on policy in the minutes.
"The emergence of the coronavirus was likely to increase uncertainty in the coming months, which could lead to a deterioration in global growth prospects again and an increase in risk aversion in emerging markets," The Council said.
"Against this backdrop, decision-makers were unanimous in arguing that a data-driven, cautious approach should be maintained in monetary policy decisions," according to the minutes.
The minutes show the Council voted unanimously to keep the central bank O/N deposit rate at -0.05% and the base rate at 0.90pc at the policy meeting. Kolos Kardkovács, an external member of the Council, was not present at the meeting.
The Council has kept the rates on hold since last spring but tweaked policy by adjusting the amount of liquidity to be crowded out from central bank instruments that pay the base rate on a quarterly basis.
MOL Shareholders Approve Dividend of Around HUF 250/Share
Chinese President to Visit Budapest in May
LOT Seoul Flight Lands in Kazakhstan Due to Drunken Passenge...
Liz & Chain Rooftop Bar Debuts Sustainable Cocktails
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.
