Are you sure?

Rate-setter sees moderate, protracted tightening cycle

The National Bank of Hungary's tightening cycle started in November could be "moderate" and “protracted”, deputy governor Ferenc Karvalits said in an interview with Reuters on Friday.

“Given that in my assessment inflation will unfold along the baseline scenario, I think a moderate, protracted, slow tightening cycle is desired, which can also include one or two months of pause between interest rate steps,” Karvalits told Reuters.

The MNB's Monetary Council raised rates in November for the first time since October 2008. At a meeting in December, the Council raised rates again, by 25bp to 5.75%, with a vote of 4:1. Karvalits was the only member to vote to keep rates on hold, while the central bank governor and his other deputy voted to raise the rate.

Consumer price inflation rose 4.7% in December from twelve months earlier, the Central Statistical Office (KSH) said on Friday. The bigger-than-expected rise was up from 4.2% in November. (MTI-Econews)