HUNGARY: NBH Sees Scope for Cautious Rate Cuts in Coming Period

Highlights from the policy statement:

• In the Monetary Council’s assessment, there may be scope for cautiously lowering interest rates further in the coming period, depending on the expected interest rate policies of the world’s leading central banks, as well as developments in the domestic inflation outlook and changes in Hungary’s risk perception.
• The volatile financial market developments, the renewed increase in geopolitical tensions and the risks to the outlook for inflation continue to warrant a careful and patient approach.
• Historically high foreign exchange reserves, the persistent current account surplus, the Government’s deficit reduction measures and a cautious approach to monetary policy act in the direction of an improvement in the country’s risk perception.
• The inflation rate is expected to fluctuate close to the upper bound of the tolerance band in the coming months.

See the full release here.