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Central bank governor puts year-end inflation as high as 6.5%

The National Bank of Hungary (NBH) projects twelve-month year-end CPI will reach 6.0-6.5pc in 2006, with annual average inflation at 3.9-4.0%, central bank governor Zsigmond Járai said on Friday at a meeting of company leaders.

Járai reiterated the bank's aim to use monetary policy to bring inflation to around 3%, akin with price stability, but said Hungary is "very far from this and will be even further in 2007." He noted that CPI is expected to reach 7-8% in the first few months of 2007 because of the government's austerity measures. Inflation will fall back to 4% no sooner than 2008, he said. Járai called investors' expectations for Hungary to introduce the euro in 2014 "optimistic". (Mti-Eco)