National Bank of Hungary rate-setters may keep the central bank's key rate on hold at a meeting in January after raising it in November and December, Csaba Csáki, one of the external members of the NBH's Monetary Council, told Bloomberg in an interview on Tuesday.
"We started the tightening cycle to signal that the central bank is acting on inflation and the thought behind it was that only a slight increase in rates was needed, say a maximum of 0.75 percentage points, and that the increases need not come one after the other," Csáki told Bloomberg. "We never intended for a massive or lengthy tightening cycle," he added.
The rate rises in November and December, both 25bp, were the first by the NBH since October 2008.
In a statement published after the rate-setting meeting on December 20, the Council said it decided to raise the base rate "in light of inflation remaining persistently above the 3% target as well as the upside risks to inflation. In the coming months, the Council will decide whether to raise interest rates after weighing up the balance of inflation risks," it added. (MTI Econews)