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MNB likely to raise rates 50bp at Tues meeting - Reuters poll

The National Bank of Hungary’s Monetary Council is likely to raise rates by another 50bp at a meeting on Tuesday, according to a poll of analysts by Reuters.

Fifteen of 21 analysts polled by Reuters on January 16-18 said rate-setters would probably raise the base rate by 50bp to 7.50% at the meeting on January 24. Three analysts forecast a 25bp rise and three expected no change.

The Monetary Council raised the central bank’s key rate by 50bp at both of its monthly rate-setting meetings in November and December.

According to the minutes of the December meeting, "members...agreed that if perceptions about the economy and the outlook for inflation continued to worsen significantly, it might prove necessary to raise interest rates further."

Consumer prices rose 4.1% year-on-year in December, the latest data show. CPI is set to accelerate in January on the back of tax rises.

Emerging market analysts in London have said the MNB is likely to continue raising rates to strengthen the forint until Hungary reaches an agreement on a financial safety net from the IMF and EU.