National Bank talks about risk of a higher inflation, unanimously decides about base rate

Members of the Monetary Council of the National Bank of Hungary (NBH) voted unanimously to keep the central bank base rate on hold at a monthly policy meeting in February, the minutes released on Wednesday confirmed.

All nine of the Council’s members voted to keep the base rate at 6.50pc, which was the only proposal discussed at the meeting. “Generally, members were of the view that maintaining a restrictive monetary policy stance was still necessary, and positive real interest rates ensured the achievement of central bank targets,” according to the minutes.

The members reiterated their commitment to restarting disinflation as soon as possible and meeting the inflation target in a sustainable manner.

The members said that disinflation was expected to resume in the first quarter, but pointed to incoming data suggesting an increased risk of a higher inflation path. They stressed that anchoring inflation expectations was “crucial” to achieve sustainable price stability.