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Hungary’s MNB base interest rate may rise by 0.5-1%, analysts say

The base interest rate of the National Bank of Hungary (MNB) may rise by 0.5-1% in the next six months, several financial watchdogs in London say.

JP Morgan believes the most likely outcome of MNB’s monetary council meeting on Monday is a 0.25% rise, but already in March this could be followed by a similar hike and another 0.5% in the Q2 of the year. JP Morgan analysts think the interest rate will remain untouched in the H2 of the year. Goldman Sachs expects, the monetary council to increase the interest rate by 0.5% on Monday, while Dresdner Kleinwort also expects a rise, but without guessing the rate. The financial consultants challenge MNB’s credibility, because the inflation forecasts are constantly modified and MNB could not meet its inflation targets in the last three years. JP Morgan says the average inflation forecast may top at 6% for this year and at 3.5-3.8% for next year. (Gazdasági Rádió)