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Inflation target realistic without further tightening, says Simor

The inflation target of the National Bank of Hungary (MNB) can be achieved without further tightening, central bank governor András Simor said at an event organized by regional daily Hajdú-bihari Napló on Thursday.

According to the baseline projection in the MNB 's latest quarterly inflation report, the 3% "price stability" target could be met by the end of 2012 without any further tightening, Simor said. There are risks, such as cost shocks resulting from higher oil prices which are now muted because of low domestic demand and high unemployment.

Hungary's banking system is resistant to shocks, but is not able at present to support a pick-up in the economy, Simor noted. Banks' ability and propensity to lend are both weak, he added.