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Rate-setters continue to rely on inflation reports

The Monetary Council of the National Bank of Hungary (MNB) will continue to "rely mainly" on the central bankʼs quarterly Inflation Report when assessing the outlook for inflation, while also analyzing monthly macroeconomic data, show the minutes from the monthly policy meeting in April released Wednesday.

"Council members confirmed that a cautious approach was warranted over the coming period and that, in monetary policy decisions, they would rely heavily on the comprehensive projections in the quarterly published Inflation Report," state news agency MTI cited the minutes as saying.

However, the minutes added that "several members underlined that a comprehensive analysis of incoming monthly macroeconomic data, on the whole, would be conducted simultaneously with the projection of the June inflation report."

At their March policy meeting, rate-setters had said uncertainty created by strong upside and downside risks to the inflation outlook prevented "clear forward guidance" and required monetary policy shaped by "a series of individual decisions."

In the minutes from the April meeting, Council members again noted the upside risk to inflation of "persistently buoyant" domestic demand, contrasted with the downside risk of weakening external activity, although no mention was made on this occasion of any inability to provide clear forward guidance.

The Council did nevertheless reiterate that the monetary policy stance "would continue to be accommodative" and "economic agentsʼ financing costs would remain favorable."

At the policy meeting on April 30, Council members voted unanimously to keep both the central bank base rate and the O/N deposit rate unchanged at 0.90% and -0.05%, respectively.