BOC SAYS DOESN'T NEED TO ALTER PATH OF QT RIGHT NOW

this is a test, please ignore

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ING Say Measures Provide Adequate Answers To Temporary Challenges

HUNGARY
  • Action can be viewed as an emergency rate hike using a tactical weapon. While the structural interest rate environment was practically unchanged – except for a technical 950bp hike in the O/N repo – this new O/N quick tender provides a temporary, highly-effective tool that ensures rapid and flexible implementation of tighter monetary policy conditions in turbulent times.
  • The National Bank of Hungary still sees the inflation peak coming soon and while the coming months will bring some further acceleration in inflation, these will come from one-off impacts. On the other hand, there are some signs of a cooling demand-driven inflation as well. In this regard, an intervention with a regular tool (i.e. emergency hike in the base rate) would be counterproductive over the monetary policy horizon.
  • Although this decision by the National Bank of Hungary will add a bit more complexity to the monetary policy setup, we see these measures as adequate answers to the temporary challenges which the local financial markets are facing.
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