HUNGARY: Outlook for Inflation Warrants Patient Approach to MonPol

Little new information of note in the minutes release, with familiar themes being reiterated by the central bank. Highlights are as follows:

• The starting economic growth in Hungary, historically high foreign exchange reserves, a persistent improvement in the current account balance and a cautious approach to monetary policy had contributed to an improvement in the country’s risk perception.
• However, the volatile financial market environment and the risks to the outlook for inflation continued to warrant a careful and patient approach.
• Discussing the outlook for domestic inflation, the decision makers noted that the pace of price increases would rise temporarily in the middle of this year.
• Another decisive aspect was the effect of the international monetary policy environment, particularly the persistently high interest rate environment in the US, on the room for interest rate policy manoeuvre in Hungary.

See the full release here.