MNI NBH WATCH: Policy Hold Ahead of New Projections, Governor
MNI (LONDON) - The National Bank of Hungary is expected to leave its base rate unchanged at 6.5% this week after another higher-than-expected inflation print, with attention focusing on communications ahead of the arrival next month of new governor Mihaily Varga.
Annual average headline inflation added 0.9 percentage point in January to 5.5%, as prices rose 1.5% month–on-month. (See MNI POLICY: Jan Data Confirms NBH Hold, But Improvements Seen)
The NBH removed any reference to cutting rates from the statement accompanying January’s rates decision, ahead of the March arrival of new Governor Mihaily Varga.
Next month’s Inflation Report is expected to deliver an upwards revision in the policy outlook, though optimism over the influence of base effects and a possible Ukraine peace deal mean rate cuts cannot yet be ruled out.