All 25 participants in a poll of analysts by Reuters on June 14-16 said they expected the National Bank of Hungary's (NBH) Monetary Council to keep rates on hold at 5.25% at a meeting on June 21.
The council voted to keep rates on hold a month earlier, the first pause in a campaign of rate cuts started last July that shaved 425bp of the key rate to bring it to a record low.
"Monetary Council members agreed that there had been a deterioration in the outlook for inflation and perceptions of risks associated with the economy compared with the positive developments in the previous period, reducing the scope for easing monetary policy," the condensed minutes of the meeting on May 31 show. "Interest rates might only be reduced further if the outlook for inflation and perceptions of risks improved," the council said.
"When this (nervousness in global markets) passes, and the (Hungarian) budget deficit target is met and there is a tight budget for next year, Hungary's risk assessment can improve," György Barcza, an analyst at K&H Bank, told Reuters. "Inflation would already allow a rate cut, but the key question now is what the markets allow," he added. (MTI-ECONEWS)